Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Dartmouth Corporation Bill,

Hastings Corporation Bill,

Leeds and Liverpool Canal Bill,

Lords Amendments considered, and agreed to.

Newquay Water Bill,

South Metropolitan Gas Bill,

Lords Amendment considered, and agreed to.

South Essex Waterworks Bill [Lords],

To be read a Second time upon Wednesday.

Oral Answers to Questions — INDIA.

STRIKE, BOMBAY.

Mr. DAY: 1.
asked the Under-Secretary of State for India whether he has received any information as to the number of employés at present idle through the strike at the mills in Bombay; whether there have been any incidents occurring between the strikers and the police which have resulted in fatalities and, if so, how many; and has he received any Report from the Commerce Member of the Government of India on the depressed state of the industry and the causes of the strike?

The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): About 145,000 workers are idle as the result of the strike. There was one fatality on the 23rd April—as regards which I would refer the hon. Member to the reply given on 10th May to the hon. Member for North Battersea (Mr. Saklatvala)—but none has occurred since. The Indian
Tariff Board investigated last year the depressed condition of the cotton industry, and on its Report certain remedial measures were taken. From reports which have been received from the Government of India, it appears that the strike is in a large measure due to the introduction of new systems of work recommended by the Tariff Board.

Mr. DAY: Can the right hon. Gentleman say how many of the mills are closed on account of the strike?

Earl WINTERTON: Not without notice.

Colonel HOWARD-BURY: Has the Noble Lord's attention been called to the statements about moneys from Communist sources, both in this country and Russia, being used for the accentuation and prolongation of the strike?

PRISONER'S RELEASE, PUNJAB.

Mr. THURTLE: 2.
asked the Under-Secretary of State for India if he has any information regarding the release of a man named Bannerjee, under sentence of five years' rigorous imprisonment, by the Punjab Government; and whether he has any statement to make on this point?

Earl WINTERTON: I have no information beyond what has appeared in the Press.

Mr. THURTLE: Is the Noble Lord aware that it is believed in the Punjab that this man was employed in the rule of agent provocateur, and will he make inquiries to find out if such is or is not the fact?

Earl WINTERTON: No doubt my Noble Friend will in clue course receive information from the Government of India as to what has happened in this case.

EAST INDIA RAILWAY (DISPUTE, LILLOOAH).

Mr. SAKLATVALA: 3.
asked the Under-Secretary of State for India if he lie has now received any report of the magisterial inquiry into the shooting of railway men in the Lillooah district at Bamangachi; and whether the superior European staff was called out to take part and did take part, in shooting the Indian workers on strike?

Mr. LANSBURY: 4.
asked the Under-Secretary of State for India whether his attention has been called to the report of the district magistrate of Calcutta that on 28th March, during the occasion of disturbance in connection with a labour dispute, the officer in charge of armed forces engaged in restoring peace ordered his men to fire on selected persons in the crowd; that no warning was given before firing and no order was issued that the men should fire low; that the two men alleged to have been shot down as selected persons were not stone throwing hut were actually behind those who were attacking the police; and whether, in view of these charges, he will order a full public inquiry into all the circumstances Connected with the disturbance, and especially into the charges made by the district magistrate against the British officer in charge of the soldiers and police?

Earl WINTERTON: I regret that I am not in a position to make any statement on this matter to-day as the reply from the Government of India to my Noble Friend's telegraphic inquiry has only been received within the last half-hour and has not yet been deciphered. Perhaps, the hon. Members will repeat their questions later in the week.

Mr. LANSBURY: Are steps being taken by the authorities in India to mediate between the disputants in order to avert this sort of happening?

Earl WINTERTON: I think the hon. Member had better put down a question upon that point. Efforts are being made to bring the parties together, but the matter is complicated by a great many considerations, including Communist activity within and without India.

Mr. LANSBURY: If I put down a question for Thursday or Monday, will that be too soon?

Earl WINTERTON: If the hon. Member would like to put down a question for to-morrow or Wednesday, I think I should be in a position to answer it.

Mr. SAKLATVALA: Is not this railway a Government concern, and are not the Government themselves the employers?

Earl WINTERTON: I do not think that question has any bearing on my answer. I said that efforts are being made to bring the parties together.

Mr. SAKLATVALA: Would it not be impossible for the Government if they are the employers, to act as mediators between the parties?

SINGAPORE NAVAL BASE (ADJACENT LAND).

Lieut.-Colonel HENEAGE: 5.
asked the Secretary of State for the Colonies if he has received any information as to the purchase, or attempted purchase, of land by a foreign Power in the neighbourhood of Singapore naval base and wireless station: if any of the land in question is in the possession of the Sultan of Johore; and if be is considering the question of the foreign ownership of land within gunshot range of the naval station?

The SECRETARY of STATE for the COLONIES (Mr. Amery): A statement has come to my notice that foreign companies have made offers to His Highness the Sultan of Johore in regard to an island in the Settlement of Singapore which he holds on lease from the Colonial Government, and I am making inquiry into the matter. The further question raised by my hon. and gallant Friend will not be overlooked.

IRAQ (BRITISH OFFICIALS).

Mr. MAXTON: 6.
asked the Secretary of State for the Colonies what is the total number of British officials now fulfilling either administrative or judicial functions or acting in an advisory capacity in the British mandated territory of Iraq: whether the salaries of these officials are borne by His Majesty's Government or by the Government of Iraq: and what is the amount of those salaries?

Mr. AMERY: Excluding military and subordinate personnel the total number of British officials in the employment of the Government of Iraq at the present time is approximately 130. Their salaries, of the exact amount of which I am not aware, are paid from the Iraq Treasury.

SOLOMON ISLANDS (PRISON CAMP, MALAITA)

Mr. THURTLE: 7.
asked the Secretary of State for the Colonies how many of the Solomon Islanders who have been in prison since last October awaiting trial have died; whether he has now received the Report of the High Commissioner on the matter; and whether he proposes to take any further action?

Mr. AMERY: A telegraphic report of the 2nd April gives the number of deaths as eight. I have since received a despatch by mail giving a report up to the 8th March, by which date five deaths had occurred—two from dysentery and three from causes other than dysentery. Many of the prisoners were undernourished and emaciated when they were brought in, all were kept under close observation by the senior medical officer, and their general health improved in a very marked degree as the result of regular and substantial diet. Apart from the outbreak of dysentery, there had been little illness among the prisoners, and admissions to hospital bad been few. I am expecting a later report by the next mail.

Mr. THURTLE: Can the right hon. Gentleman say when it is proposed to bring these men to trial?

Mr. AMERY: I think I answered a question on that point the other day.

CYPRUS (MINING ACCIDENTS).

Mr. SAKLATVALA: 10.
asked the Secretary of State for the Colonies if he can give this House particulars as to the accidents which occurred in the mines of Amiandos, Cyprus, on 28th March, 1928, as a result of which one worker was burned by electricity and two others killed by falls of rock, and of the accident which occurred in the mines of Skouriatissa, Cyprus, on or about 20th March, 1928, where one worker was killed and two injured by electricity; if he is assured that necessary safeguards are being taken by the inspector of mines for the Colony to prevent the recurrence of such disasters in the future; and whether any steps are contemplated to institute a code of laws and regulations governing working conditions in the island of Cyprus?

Mr. AMERY: I have no information respecting these accidents. In 1925 a Mines Regulations Law was passed to make provision for the regulation and inspection of mines in order to ensure safety and proper working conditions, and for the payment of compensation to injured workmen. A Government Inspector of Mines was appointed to enforce the provisions of the law, and I think the hon. Member can rest assured that all practicable measures are being taken to prevent accidents. With regard to the last part of the question, I may add that in addition to the Mines law a law was recently passed regulating the hours of employment generally; and I understand that a Bill is to be brought before the Legislature at its present Session, to regulate the employment of children and young persons in industrial undertakings.

Mr. SAKLATVALA: Will the right hon. Gentleman be good enough to obtain information about these accidents, as it may have a bearing on the carrying out of the laws in that part?

Mr. AMERY: I have given the hon. Member all the information in my power, and at present I believe that everything is being done to watch over the possibility of accidents there.

Oral Answers to Questions — SOUTHERN RHODESIA.

TATI CONCESSION.

Captain CAZALET: 11.
asked the Secretary of State for the Colonies whether any arrangement has yet been made in regard to the proposed incorporation of the Tati concession in Southern Rhodesia?

Mr. AMERY: I discussed this matter with a deputation of the settlers in the district during my visit to South Africa last year, but after careful consideration I came to the conclusion that I could not see my way to arrange for transfer in the near future.

NATIVE DWELLINGS (CONDITIONS OF CONTRACT).

Mr. ERNEST BROWN: 15.
asked the Secretary of State for Dominion Affairs whether he is aware that, when the Municipal Council of Salisbury, Southern Rhodesia, undertook to
erect in native areas, for the habitation of natives, a certain number of native dwellings, it was decided to reject any tenders unless native bricklayers and plasterers were prohibited from taking any part in building these native dwellings; and whether, in view of the provisions in the letters patent as set forth in the Paper [Cmd. 1573] of 1922, he proposes to take any action in the matter?

Mr. AMERY: I have seen references to the matter in the Southern Rhodesia Press, but I have no other information on the subject. The question does not appear to be one regarding which I have the power to take any action under the provisions of the letters patent.

Mr. BROWN: Can the right hon. Gentleman say whether this colour bar was enforced under pressure from the Rhodesian Labour party?

Mr. AMERY: I do not know at all. It is purely a municipal matter.

BOYS (EXECUTION).

Mr. THURTLE: 16.
asked the Secretary of State for Dominion Affairs if he is now in a position to give the House any information regarding the three boys who were executed in Southern Rhodesia and referred to in Command Paper 3076?

Mr. AMERY: I have addressed an inquiry by despatch to the Government of Southern Rhodesia, but some weeks must elapse before a reply can be received.

WEST AFRICAN POLICE (PAY).

Captain CAZALET: 12.
asked the Secretary of State for the Colonies whether he contemplates any alteration in the pay and allowances of the West African police force?

Mr. AMERY: No proposals for any alteration in the emoluments of the various police forces have been put before me.

Captain CAZALET: Is my right hon. Friend aware that the pay of these officers in the West African force is considerably less than that of any other Government officials in the same area and is quite inadequate to meet the needs of the situation?

Mr. AMERY: I will look into the matter, but I am not aware that any complaint has arisen.

EMPIRE SETTLEMENT (CANADA).

Mr. HASLAM: 13 and 14.
asked the Secretary of State for Dominion Affairs (1) what was the number of persons in the United Kingdom and Northern Ireland presenting themselves to the Canadian doctors for medical examination with a view to emigration between 1st January and 30th April, 1928, and the number of such who were rejected on medical grounds;
(2) what was the number of persons in the United Kingdom and Northern Ireland requested by the Canadian emigration officials to present themselves to the Canadian doctors during the first four months of the present year and what was the number who actually responded; and what was the number who gave distance, inconvenience, or expense as a reason for their inability to respond?

Mr. AMERY: During the period 1st January to 30th April, 1928, 30,451 persons were requested by the Canadian authorities to present themselves for medical examination with a view to their settlement in Canada. Of these, 29,209 were actually examined. The remainder will probably be examined during the coming months. The numbers rejected on medical grounds, or unable to attend for examination for the reasons mentioned by my hon. Friend, are not yet known.

Mr. HASLAM: Is my right hon. Friend keeping in touch with the Canadian authorities on this matter and using his influence to see that no able-bodied men or women who desire to proceed to Canada are deterred from going?

Mr. AMERY: We are doing everything we can to keep the matter before the Canadian authorities.

BRITISH FIRM'S ACTION, HOLLAND.

Mr. RAMSDEN: 17.
asked the Secretary to the Overseas Trade Department whether his attention has been drawn to the case of a Bradford firm who delivered
goods valued at £1,041 17s. 2d. to a Dutch manufacturer in January and February of 1920, which goods were subsequently refused, and that an action was commenced in the Dutch Courts in December of the same year; and whether, as no decision has been made, he will make representations with a view to it being expedited?

Mr. DOUGLAS HACKING (Secretary, Overseas Trade Department): I have made further inquiries in regard to this case and understand that the Dutch Tribunal dealing with the matter will give a decision this month.

AGRICULTURAL WAGES (EASTER).

Mr. KELLY: 18.
asked the Minister of Agriculture if he can state the result of the investigation that was made in Essex regarding the failure to pay wages in accordance with the orders made under the Agricultural Wages Regulations for the weeks in which Good Friday and Easter Monday fall?

The MINISTER of AGRICULTURE (Mr. Guinness): Legal proceedings were taken on the 11th May against a firm at Chelmsford for failure to pay the minimum rates of wages during the week in which Good Friday fell. A fine of 10s was imposed, and the arrears of wages were ordered to be paid.

Mr. KELLY: Do I understand that, now that the decision is given, the right hon. Gentleman's inspectors will take in hand the other cases?

Mr. GUINNESS: Yes. This being in the nature of a test ease, I hope there will be no further legal actions.

FISHING INDUSTRY (IMMATURE FISH).

Mrs. RUNCIMAN: 21.
asked the Minister of Agriculture whether his Department is aware of the large quantities of immature herrings and other fish which are being landed at the present time or being destroyed at or near various fishing ports; whether he will ascertain the amount of damage done by the catching of these immature fish to fishermen as a whole; and whether he can take any steps, by legislation or otherwise, to prevent the landing of immature fish at British pores?

Mr. GUINNESS: I am aware that considerable quantities of fish are taken by present-day methods of fishing at a stage at which their commercial value, if any, is low. The extent to which fishing by present-day methods is likely to injure the stock upon which the prosperity of the fishing industry depends has for many years past been receiving the serious attention of my Department. Prohibition of the landing of fish on account of immaturity or for any other reason would involve legislation which would inevitably be highly controversial, and I can hold out no hope of its introduction.

Sir ROBERT HAMILTON: Have any steps been taken to regulate the size of the mesh, which trawls up undersized fish?

Mr. GUINNESS: We have been carrying on experiments with trawls, with a view to finding a mesh that can let the immature fish escape, but, as the hon. baronet knows, fish vary greatly in shape, and, so far, we have not reached any final conclusion.

RIVER COQUET (FISHING RIGHTS).

Mr. TREVELYAN: 22.
asked the Minister of Agriculture whether he is aware that the conservancy board of the River Coquet have applied for powers to charge a licence of £150 on the fishing rights at the Warkworth and Morwick dams on that river; and whether he has caused any public inquiry to be made into this application by the conservancy board?

Mr. GUINNESS: The Fishery Board have applied for approval to a determination of a licence duty under which the existing licence duty payable for each and every draft or hang net used only in private waters in the part of the river referred to would be increased from £5 to £150. As the Fishery Board have not complied with my request to furnish me with a prima facie case justifying the increase, I do not consider that it would be proper to proceed further in the matter and put the parties and the country to the expense of a public inquiry.

Mr. TREVELYAN: In case the Board increase their fees, will the right hon. Gentleman have an inquiry?

Mr. GUINNESS: If I think that there is a prima facie case, but not otherwise.

Mr. TREVELYAN: Is the right hon. Gentleman aware that practically everyone in Northumberland thinks that there is a prima facie case?

Mr. GUINNESS: For increasing the licence duty to £150?

Mr. TREVELYAN: Not necessarily, but increasing it beyond £5.

Mr. GUINNESS: I think that I had better wait until I get information before I commit myself, but in no case is there any licence duty of more than £10 in force.

HYDE PARK (RIMA SCULPTURE).

Sir WILLIAM DAVISON: 24.
asked the Under-Secretary of State for the Home Department, as representing the First Commissioner of Works, when it is proposed to open for the use of the public the large plot of grass immediately opposite the Rima sculpture in Hyde Park; why this plot has been fenced off for such a long period; and whether he will arrange with the Home Office for police protection to be given to this piece of sculpture without excluding the public from the lawns in its immediate vicinity?

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Lieut.-Colonel Sir Vivian Henderson): The fencing in of this area has nothing to do with the Epstein sculpture; the grass was much worn and the fencing was necessary in order to carry out restoration, and it will be removed during the summer.

Sir W. DAVISON: Is my hon. Friend not now in a position to realise the dislike of the public generally to this statue, and will he consider the question of removing it to a museum, where it will not be frightening, either to birds or to lovers?

Sir V. HENDERSON: I went to see the piece of grass in question this morning, and I did not notice that the London sparrows were in any way disturbed.

Commander WILLIAMS: Are we to understand that this statue is so bad that even the grass will not grow?

ANGLO-PERSIAN AGREEMENT.

Lieut.-Commander KENWORTHY: 25.
asked the Secretary of State for Foreign Affairs whether he can report any further developments between His Majesty's Government and the Persian Government on the outstanding questions under discussion; and what prospect is there of the Persian Government lifting its veto on British aeroplanes in flight over Persian territory?

The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Austen Chamberlain): A Treaty regulating the commercial relations between this country and Persia was signed at Tehran on the 10th of May by His Majesty's Minister on behalf of Great Britain and Northern Ireland and all other parts of the British Empire which are not members of the League of Nations, and of India. The Treaty, which has been concluded for a period of eight years, provides for the abrogation of all provisions of existing Treaties which limit in any way the right of Persia to settle her Customs tariff autonomously. It provides that, on condition of perfect reciprocity, British and Indian goods imported into Persia shall not be subject to higher duties than are the goods of any other foreign country. By this Treaty, the minimum rates in the tariff approved by the Persian legislature on the 3rd of May will be applied to British and Indian goods. It is also provided that if at any time the rates of the minimum Persian tariff are reduced on any frontier, British and Indian goods shall benefit by those reductions, by whatever frontier they are imported. In a protocol attached to the Treaty, the Persian Government reserve the right to increase the rates of the minimum tariff in the event of the duties on the chief Persian articles, other than oil, imported into Great Britain or India being increased. In an exchange of Notes, it is agreed that the Treaty shall provisionally enter into force at once pending formal exchage of ratifications, and that goods consigned to Persia before the 10th of May shall not pay rates higher than those in the 1920 Tariff.
Further Notes were exchanged at the same time maintaining in force, with a view to the conclusion within a year of a full Treaty of Commerce and Navigation, those provisions of existing Treaties which do not limit Persia's tariff auto-
nomy. In particular, reciprocal mostfavoured-nation treatment of subjects and trade and the status quo in regard to the national treatment of shipping are to be continued. Other Notes exchanged regularised the position with regard to the Dominions.
As regards facilities in Persian territory for the proposed air service between Egypt and India, the Persian Government have formally stated their readiness to enter into negotiations with a representative of Imperial Airways Limited, regarding the conditions on which such a service should be operated.
With regard to the abolition of the capitulations in Persia on the 10th of May, the Persian Government have addressed to His Majesty's Minister a list of the safeguards which they are prepared to extend to British nationals in Persia; and steps are being taken to bring these safeguards to the knowledge of British nationals concerned. These safeguards are in complete accordance with the relevant provisions of Persian law as recently amended.
Finally, the Persian Government have agreed formally that missionary enterprises in Persia shall be authorised to carry on their charitable and educational work on condition of not contravening either public order or Persian laws and regulations.
In conclusion, I am happy to take this opportunity of expressing the satisfaction of His Majesty's Government at the energetic collaboration which the Persian Minister of the Court has shown in reaching this comprehensive agreement with Sir Robert Clive, of whose efforts I have already expressed my appreciation.

Lieut. - Commander KENWORTHY: While thanking the right hon. Gentleman for the reply, may I ask if it would be convenient to him to say whether the Persian Government agrees to recognise the Government of Iraq?

Sir A. CHAMBERLAIN: I shall be glad if the hon. and gallant Gentleman will give me notice of that question. I could give a brief answer, but I would like to give a considered reply.

Lieut. - Commander KENWORTHY: I will put it down for Monday.

CHINA (SITUATION).

Mr. LOOKER: 26.
asked the Secretary of State for Foreign Affairs the nature of the forces available at Tientsin for the protection of the British community there in the event of the city being occupied by Nationalist troops; and whether any arrangements have been made for strengthening such forces without delay should necessity render such a course advisable?

Sir A. CHAMBERLAIN: The following troops are at present at Tientsin:


United States of America
758


United States of America
3,000*


British
1,623


French
2,008


Italian
401


Japanese
462



8,252


* Marines.


300 Italian and 700 Japanese reinforcements are being sent, but have not yet arrived. Artillery at Tientsin consists of 46 guns and 11 mortars; the United States of America have also 1 section of engineers, 5 tanks and 12 aeroplanes. There are also 1,684 troops, of the above nationalities, at Peking, with 16 guns and 8 mortars, and Italian and Japanese reinforcements, totalling 240, are being sent. 909 additional troops are distributed along the railway between Tientsin and Shanhaikuan. His Majesty's Government are closely watching the situation at Tientsin, and should it be necessary to strengthen our forces there, there would be no difficulty in doing so.

Mr. LOOKER: Have any arrangements been made for creating a new neutral zone outside Tientsin?

Sir A. CHAMBERLAIN: I must have notice of that question; I cannot answer exactly.

Lieut.-Commander KENWORTHY: Has the right hon. Gentleman seen the reports in the papers to-day that these troops are not being used for the protection of the international settlement at Tientsin, or the concessions, and are forming a line right outside the city?

Sir A. CHAMBERLAIN: I cannot answer exactly, but, so far as my know-
ledge goes, the troops are only being disposed where the military authorities of the different Powers concerned think that they can best protect the lives of foreign nationals.

Mr. LOOKER: 27.
asked the Secretary of State for Foreign Affairs whether he is in a position to make any statement as to the position in China; and whether any special steps have been taken to ensure the protection of the British communities there, both in North China and elsewhere?

Mr. TREVELYAN: 30.
asked the Secretary of State for Foreign Affairs what is the latest information in his possession as to the situation in Shantung; whether His Majesty's Government is making any efforts to prevent a state of war arising between the Japanese and Chinese Nationalist troops; and whether any cognizance of the situation is being taken by the Council of the League of Nations under the covenant of the League?

Sir A. CHAMBERLAIN: On the 9th of May Chang-Tso-Lin sent a circular telegram to all provinces stating that he had instructed his troops to cease hostilities, and adding that on the question of national politics he would accept a fair and impartial decision agreed to by the Chinese people. In accordance with these overtures, his troops are withdrawing on all fronts and no fighting is reported anywhere. Owing to the interruption of communications, I have no direct news from the Consul-General at Tsinanfu, and such information as I possess regarding the situation in Shantung is derived chiefly from Japanese sources.
A report from the Japanese Consul at Tsinanfu dated the 5th May gives an account of the commencement of the trouble. It states that the Northerners withdrew from Tsinanfu on the night of 30th April, the Southerners entering peacefully on the following day. On 2nd May there was no sign of disorder, and the Southern Army requested that the Japanese should remove the protective safeguards that had been set up. This was agreed to, and the protective devices were removed by the Japanese at 11 p.m. On 3rd May, at about 10 a.m., two Japanese police were
despatched to a Japanese house on receipt of news of looting. They found the house completely looted, with five Chinese soldiers belonging to the Seventh Battalion of the Third Division of the Fortieth Army still there. The soldiers abused the police and threatened them. One policeman returned to the police station to report, and at this stage five Chinese and six more Chinese soldiers joined the first party, armed with revolvers. They shouted, "Kill the Japanese," and assaulted the police. A party of about 30 Japanese soldiers arrived under a lieutenant, whereupon the Chinese ran away and took refuge in a Chinese military depot with the flag of the Seventh Battalion, Third Division, on it. The Japanese soldiers pursued them, and when they reached the gate of the depot were fired on by Chinese soldiers from inside. To this fire they replied, and fighting then spread. At the time the Japanese General in command of the Division was making a round of calls and the Japanese Consul was having an interview with General Chiang-Kai-Shek. The Japanese Consul was of the opinion that the affair was due to systematic provocation by unruly elements among the Southerners and was the result of Communistic intrigue. Outrages on Japanese civilians, both men and women, are also reported.
The Japanese Vice-Minister for Foreign Affairs informed His Majesty's Chargé d'Affaires that as a result of these incidents the Japanese military authorities had demanded Chinese withdrawal to 20 li (about seven miles) from Tsinanfu and from either side of the railway within a time limit of 12 hours. These demands were presented on 7th or 8th of May. There were also other demands, but the withdrawal and punishment of the guilty parties were the most important. The Chinese did not reply, whereupon Japanese troops proceeded to clear the Southern troops from the town, inside and outside the walls. According to a further report by the Japanese Consul at Tsinanfu, as a result of an agreement made between him and various local guilds, all Southern troops in the city were allowed to evacuate unarmed between 8 a.m. and 2 p.m. on 11th May. The city is now entirely in the hands of the Japanese and order is being maintained by the local Chinese
authorities, backed by the Japanese military. I am glad to say that all British subjects in Shantung appear to be safe.
Neither of the parties involved in the trouble in Shantung has indicated that the intervention or mediation of His Majesty's Government would be acceptable, but a telegram bearing the name of General Tan Yen-kai, then chairman of the Political Council at Nanking, has been received by the Secretariat-General of the League of Nations and circulated to States members of the Council. This telegram requests the summoning of a meeting of the Council and urges that the League shall request the cessation of hostilities on the part of the Japanese troops and their immediate withdrawal from Shantung.
British warships have been sent to Chinwang-tao, Wei-hai-wei, Chefoo and Tsingtao. Elsewhere in China normal precautions are being taken. A British warship is stationed at practically every port along the coast, and on the river wherever there are British residents.

Mr. TREVELYAN: Is the communication of the Nanking Government going to be considered by the Council?

Sir A. CHAMBERLAIN: I cannot say.

Mr. TREVELYAN: Have the British Government any view on the subject of whether it should be considered?

Sir A. CHAMBERLAIN: I am not prepared to make any statement on that matter at present. If I am to be asked a question of that kind it is one on which I am entitled to and must demand the right to notice.

Mr. THURTLE: On a point of Order. Without wishing to be in the least bit discourteous to the right hon. Gentleman, may I ask you, Mr. Speaker, whether in the event of long official replies occurring two or three times in the course of Question time you have any means by which you can safeguard the rights of other hon. Members who have questions on the Order Paper?

Mr. SPEAKER: I think this is a matter for the House. The House, I thought, desired to hear those statements. I do sometimes ask for statements to be made at the end of Questions.

Lieut. - Commander KENWORTHY: May I put it to you, Sir, that the answers given by the right hon. Gentleman deal with matters affecting British interests and British trade to a considerable extent and that it is necessary for the House to have authentic information.

Mr. LOOKER: 29.
asked the Secretary of State for Foreign Affairs whether any and, if so, what British consular or civilian premises in China are occupied by Nationalist troops or officials; whether any protest has been made in the case of any such occupation; and, if so, what reply has been received?

Sir A. CHAMBERLAIN: My most recent information regarding Chinkiang and Nanking was given in my replies to my hon. Friend on 2nd of April last. There are also mission premises in other parts of China that have been similarly occupied from time to time, but I am without full particulars. No further occupations have been reported recently.

Lieut.-Commander KENWORTHY: 31.
asked the Secretary of State for Foreign Affairs whether the Japanese Government has made any demarche or explanation or representation to His Majesty's Government with reference to the military operations now being conducted in the province of Shantung, as agreed upon under the terms of the Washington Agreement of 1921; and, if so, what are the terms of such communication and of his reply?

Sir A. CHAMBERLAIN: I am almost afraid of the length of this answer.
The Japanese Minister for Foreign Affairs informed His Majesty's Chargé d'Affaires at Tokyo of the intentions of the Japanese Government on 20th April and 8th May. Similar communications were made by the Japanese Chargé d'Affaires in London to the Foreign Office on 23rd April and on 10th May. At the first interview the Japanese Chargé d'Affaires stated that he had been instructed to inform me that his Government had decided to send 5,000 troops to Tsingtao. In connection with this information he was to emphasise the following two points:

(1) That the despatch of troops again to Shantung Province was an unavoidable measure of self-protection, by no
655
means implying anything in the nature of unfriendly intentions towards China and her people, or interference with the military operations of any of the Northern or Southern forces; and
(2) That, as soon as the Japanese Government considered it no longer necessary to maintain the troops for the protection of the Japanese residents in the affected area, the troops would be immediately withdrawn as on the last occasion.
At the second interview the Japanese Chargé d'Affaires left an aide-mémoire, the text of which I will, with the hon. and gallant Member's permission, circulate in the OFFICIAL REPORT. The Japanese Chargé d'Affaires briefly confirmed these statements to me at an interview on the 10th of May. I expressed my sympathy with Japan in the troubles with which she was now confronted and my hope that later information would not confirm the horrible account of outrages on Japanese nationals, and particularly on Japanese women, which I understood had been contained in the first reports received by the Japanese Government. I further expressed my satisfaction at the assurance that the Japanese troops would be withdrawn as soon as the safety of Japanese lives and property was assured.

Following is the text of the Aide Mémoire

Statement issued in Tokyo by the Japanese Government on 9th May.
When recently disturbances in China threatened to spread to Tsinan the Japanese Government dispatched troops for the protection of Japanese residents in that region and took occasion to explain their attitude in connection with that unavoidable course of action. It is now to be observed that since the occurrence of the deplorable incident at Tsinan the situation in that district has so much increased in gravity that the present strength of Ike Japanese troops there is insufficient for the protection of the Japanese residents. The Shantung Railway connecting Tsingtao and Tsinan is destroyed at various places, making it impossible as things stand at present to ensure means of communication by that route. In these circumstances it has been decided to dispatch the Third Division to Shantung with the object of securing the necessary protection of Japanese residents and of ensuring communication by the Shantung Railway. The present dispatch of additional troops being intended, as stated above, to protect
Japanese residents in Shantung and to ensure communication by the Shantung Railway which is essential for that purpose, its object is in no way different from that of the first dispatch of troops.
Together with the dispatch of the Third Division, it has been decided to send from Japan Proper to Tientsin five other companies which were originally scheduled to be sent in June next as a periodical relief for the Japanese garrison in China; but the date of their departure has been advanced in view of the circumstance that part of the garrison has recently been sent to Tsinan as an emergency measure. It has also been decided to dispatch an additional number of cruisers and destroyers to the Yangtse and to South China for the purpose of safeguarding Japanese residents in case unforeseen happenings should occur in the southern districts out of possible misunderstandings relating to Tsinan incident. The present dispatch of additional troops and warships is intended for no other purpose than that of protecting the lives and property of Japanese residents against such unfortunate incidents as might possibly occur in connection with the Tsinan affair and it need scarcely be added that they will be withdrawn as occasion permits on the disappearance of the necessity for their continued maintenance.

ANGLO-EGYPTIAN TREATY.

Mr. JOHNSTON: 28.
asked the Secretary of State for Foreign Affairs why, in view of the fact that the Government of the Irish Free State have declared that they contented themselves with expressing pleasure that Great Britain and Egypt were in negotiations, and the hope that an amicable agreement would be reached, an official statement was made that the Treaty had received the concurrence of all Dominion Governments?

Mr. AMERY: I have been asked to reply to this question. I would refer the hon. Member to the answer given to a question on this subject asked by my Noble Friend the Member for Shrewsbury (Viscount Sandon) on 5th April last. That answer stated that the concurrence of His Majesty's Governments in the Dominions was sought in the proposal to present the Treaty to the Egyptian Government. The reply of His Majesty's Government in the Irish Free State was to the effect stated in the hon. Member's question. It does not appear to me that this reply is at variance with the statement referred to above which, I assume, the hon. Member has in mind.

Mr. JOHNSTON: Is the right hon. Gentleman not aware that in despatch No. 6, of 24th November last, the statement was made that the required concurrence had been obtained, and is he also aware that the Deputy representing External Affairs in the Dail stated that concurrence was a bad word, and that concurrence had not been obtained?

Mr. AMERY: I think my answer covers that point.

Mr. JOHNSTON: Did not the right hon. Gentleman's answer refer me to an answer given on 5th April and not refer at all to the statement made in the White Paper No. 6 of November last?

Mr. AMERY: But I think the answer covers that point also.

TURKEY (BRITISH CLAIMS).

Colonel HOWARD - BURY: 32.
asked the Secretary of State for Foreign Affairs whether he has any information as to what progress has been made with regard to the British national claims in Turkey by the Assessment Commission in Paris, and when they expect to finish their consideration of the claims?

The FINANCIAL SECRETARY to the TREASURY (Mr. Arthur Michael Samuel): The Inter-Allied Commission for the Assessment of Damage 'Suffered in Turkey has completed the examination of about 11,500 claims (including about 3,400 claims by British nationals). The Commission expect to finish their work by the end of 1928, so far as they can at present judge.

LEAGUE OF NATIONS (LONDON BRANCH).

Colonel HOWARD - BURY: 33.
asked the Secretary of State for Foreign Affairs how many are employed in the Branch of the League of Nations in London; and what is the cost to the League of Nations of the Branch?

Sir A. CHAMBERLAIN: The League of Nations budget for 1928 provided for a staff of six persons at the London sub-office. The salaries of these persons amount to £1,105. In addition to this, provision is made for the sum of £1,966 in respect of property account and general
office expenses. The total estimated expenditure for the London Branch is, therefore, £3,071.

Colonel HOWARD - BURY: Can the right hon. Gentleman say what are the objects of this office, and whether they could not be equally well carried out by Reuter's Agency?

Sir A. CHAMBERLAIN: Oh, No, Sir; I am quite certain that they could not. I cannot say offhand what are the particular duties which are carried out by this office. I am not a Minister of the League of Nations, but a Minister of the Government.

ANGLO-AMERICAN ARBITRATION TREATY.

Mr. RENNIE SMITH: 34.
asked the Secretary of State for Foreign Affairs if he is in a position to make a statement with regard to the negotiations in connection with the Anglo-American Arbitration Treaty which expires on 4th June next?

Sir A. CHAMBERLAIN: The draft arbitration treaty to replace the Anglo-American Arbitration Treaty of 1908 communicated by the United States Government does not in all respects meet the particular requirements of His Majesty's Government in Great Britain. In view of the complexity of the questions involved and of the necessity of fully consulting His Majesty's Governments in the Dominions, further time will be required before a decision can be reached on the reply to be returned to the United States proposals. In the circumstances, it has been suggested to His Majesty's Governments in the Dominions, with the cognisance of the United States Government, that the present Root-Bryce treaty should be temporarily extended, although there is now some doubt whether the United States Senate will be able to consider this question before their forthcoming recess.

COAL INDUSTRY (OIL EXTRACTION).

Mr. HARDIE: 35.
asked the Secretary for Mines what is the cost of treating one cwt. or one ton of coal by the Bergius system of extracting oil from coal?

The SECRETARY for MINES (Commodore Douglas King): The Bergius process is still in the experimental stage and no plant of a commercial size is in existence in this country, so that it is impossible to give even a rough estimate of the cost of the process. Much more work is required on the details before the cost of working, or the conditions giving the lowest cost of working, can be stated.

Mr. HARDIE: Are we to understand that the technical men running this test have not measured the hydrogen or the coal that is being treated, and have not, in fact, made any measurements? Does the hon. and gallant Gentleman suggest that that is the case?

Commodore KING: I do not suggest anything but what is contained in my answer.

Mr. HARDIE: If the hon. Member had been answering the question he could not say that, and he is avoiding the question.

Captain STREATFEILD: Is it not the case that from the point of view of all concerned exhaustive tests are being made?

Mr. MAXTON: Is it not possible for the Secretary for Mines to tell us what is the cost of the experimental operations which are being carried out?

Commodore KING: The hon. Member will realise that the carrying out of these operations involves laboratory experiments, and the costs vary with each experiment.

Mr. HARDIE: 36.
asked the Secretary for Mines what amount of pressure is used upon the hydrogen gas in the Bergius system of extracting oil from coal?

Commodore KING: The pressures of hydrogen used in the experiments at the Fuel Research Station and those in Germany of which the Government has information, have varied from 2,500 to 3,700 lbs. per square inch. The optimum pressure appears to depend on the individual coal being treated, the temperatures used, and, of course, on commercial and engineering considerations.

Mr. HARDIE: 37.
asked the Secretary for Mines what amount of coal is used in treating one ton of coal in the Bergius system of extracting oil from coal?

Commodore KING: The coal consumed in hydrogenating one ton of coal may be divided into three parts, that used for power, that for heating, and that for manufacturing hydrogen. As power, heat and hydrogen can all be obtained by electricity produced in hydro-electric plants, it is possible that in some circumstances the answer might be "none" If, however, coal is used for all these purposes, then the answer depends on how the process is organised. Dr. Bergius, in a paper read at the International Conference on Bituminous Coal held at Pittsburg in 1926, showed how the hydrogen might be obtained from the gas evolved in the process, and if this were done he estimated that eight cwt. of coal would be required for treating one ton of coal, in an efficient large scale plant. I have no evidence to show that this is unduly optimistic, though the amount of coal used in the experimental plant is naturally much greater.

Mr. HARDIE: Are we now to understand that the only information that is to be had is from Professor Bergius, and that all our technical men in this country have no information to give, despite the fact that they have been experimenting in our laboratories?

Mr. SKELTON: May I ask whether it will not be possible in future to deal with such answers as these by circulating them in the OFFICIAL REPORT?

Mr. HARDIE: That might meet the ignorance of hon. Members generally.

BREAD PRICES.

Mr. NAYLOR: 39.
asked the President of the Board of Trade whether his attention has been drawn to the announcement that the London Master Bakers and Confectioners' Protection Society intend to raise the price of the quartern loaf; and whether he has any information as to the reasons for this advance of price?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Herbert Williams): The reason is the recent increase in the price of flour.

RATING RELIEF

Mr. KELLY: 40 and 42.
asked the President of the Board of Trade (1) what estimate has been made as to the relief in rates which it is expected will be received by the chemical trade in October, 1929, under the Budget proposals;
(2) what figure has been arrived at as the amount of relief which is expected to come to the artificial silk trade in October, 1929, under the Budget proposals, and what will be the amount for the silk trade?

Mr. E. BROWN: 41.
asked the President of the Board of Trade whether relief of rates to marine engineering was included in his recent estimate of the relief to the engineering industry; and, if not, what estimate has been made as to the relief of rates which the marine engineering and shipbuilding trades will receive under the proposed Government scheme?

Mr. H. WILLIAMS: Comprehensive information regarding the amount of direct relief from local taxation that each trade will obtain, is not available, but for a few trades some approximate estimates have been made. As has already been stated in the House, the direct relief for the engineering industry, including marine engineering, will be from £2,000,000 to £2,500,000 a year. For shipbuilding it will be about £400,000 a year; for the chemical industry about £600,000. For coal the direct relief is estimated to be about £2,500,000 a year; for cotton spinning and weaving about £1,500,000 a year; for wool combing, spinning and weaving about £750,000; for the heavy iron and steel industry about £550,000; for breweries and distilleries about £400,000. In respect of other trades the amount of information available is not sufficient to justify an estimate of the amount of relief which will be obtained.

Mr. BROWN: Are these figures based on the total establishments concerned in each trade, or do they distinguish between those parts of the establishment which are used by manual labour and those parts where the office staffs are working?

Mr. WILLIAMS: The estimates are approximate.

Mr. BROWN: May I have an answer to my question as to whether the estimates which have been made are actually based upon the rates paid by the whole of these properties or on parts of the properties, and are they divided between manual labour and the office?

Mr. WILLIAMS: As the Valuation Ascertainment Bill is not yet law, those data are not accessible, and no answer can be given to the hon. Member's question?

Mr. BROWN: Then what use are these estimates at all?

Mr. WILLIAMS: They have the same high value that all my estimates have.

Mr. KELLY: When presenting these figures will some definition be given to enable us to understand which are the Departments concerned, and What are the limitations of the particular industry—for instance heavy or light chemicals?

Mr. SPEAKER: I think we had better wait for the Bill.

Mr. SKELTON: Do the investigations which have already been made enable the hon. Member to say if the dyeing and cleaning industry is included as a producing industry?

Mr. WILLIAMS: That is a question which can be dealt with when we discuss the Bill.

SCOTLAND (DEPARTMENTAL REPORTS).

Mr. T. KENNEDY: 43.
asked the Secretary of State for Scotland if he is now in a position to say when the Annual Report of the Fishery Board for Scotland, the Report of the Board of Agriculture for Scotland, and the Annual Report of the Scottish Board of Health for 1927 will be published?

The SECRETARY of STATE for SCOTLAND (Sir John Gilmour): The Annual Report of the Board of Agriculture for Scotland for the year 1927 will be published next week. It is hoped that the Annual Reports of the Scottish Board of Health and the Fishery Board for Scotland will be published at the beginning and in the latter half of June, respectively.

CABLE AND WIRELESS SERVICES.

Mr. WALTER BAKER: 45.
asked the Prime Minister when the Report of the Imperial Conference on Cable and Wireless Services is likely to be in his hands; and how soon publication will be possible?

The PRIME MINISTER (Mr. Baldwin): I find on inquiry that it is not possible to forecast when the Report of the Imperial Wireless and Cable Conference will be available. I understand that the deliberations of the Conference will not be concluded for some little time. As soon as I am in a position to do so I will make a statement.

Mr. BAKER: Can the Prime Minister verify the statement that the negotiations of this Conference are still being carried on, seeing that at least one member of the Commonwealth Conference sailed for home on the 4th inst?

The PRIME MINISTER: I understand from the Secretary of State for Scotland, who is keeping in close touch with this Conference, that the gentleman referred to is the technical adviser.

Mr. SNOWDEN: Can the Prime Minister give the House an assurance that nothing will be done in this matter until the Report has been published, and Parliament has had an opportunity of discussing it?

The PRIME MINISTER: I should want notice of that question.

Mr. SNOWDEN: In view of the importance of this question, and the public interest taken in it, will the Prime Minister give a very early opportunity for a Debate upon it?

The PRIME MINISTER: We have always been prepared to afford an opportunity for a Debate as soon as we get the Report of the Conference, but until we get the Report it is very difficult for us to arrange for a Debate.

Mr. BAKER: Are we to understand that Mr. Lenton, the representative of South Africa at this Conference, is no more than a technical adviser?

The PRIME MINISTER: I cannot answer that question, obviously, without notice, but I will look into it.

Mr. BAKER: May I respectfully ask the right hon. Gentleman whether he remembers that I have been putting questions to him on this subject for two or three months, and the answers have been that these matters were under consideration, while the fact is—

HON MEMBERS: Speech!

Mr. BARR: Arising out of the Prime Minister's reply that until we have the Report it is exceedingly difficult to debate, may I ask if that does not justify the action taken by the Scottish Members last week?

IRISH FREE STATE (EX-BRITISH CIVIL SERVANTS).

Colonel HOWARD-BURY: 46.
asked the Prime Minister whether he proposes to hold a conference with regard to the ex-civil servants in Ireland; and whether the British Government, the Free State Government, and representatives of the Irish ex-civil servants will take part in this conference?

The PRIME MINISTER: As my hon. and gallant Friend is aware, this matter continues to engage the attention of both Governments with a view to finding a satisfactory solution; but, as at present advised, there is no intention of any formal conference, as is suggested in the question.

Sir W. DAVISON: Does my right hon. Friend realise that, while the negotiations are still going on month after month, these unfortunate people are receiving no income, although they had a unanimous decision of the Privy Council in their favour more than a year ago?

Mr. MONTAGUE: Cannot they go out and find work?

Sir W. DAVISON: No, they cannot.

NAVAL PRIZE FUND.

Lieut.-Commander KENWORTHY: 50.
asked the First Lord of the Admiralty whether any payment out of surplus prize funds has been made to the Royal Naval Division Benevolent Fund; if so, what amount has been paid to this fund; and, if no donation has been made, if he will consider making one, in view of
the fact that the members of the Royal Naval Division drew no prize money, although many of them originally enlisted for sea service?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Lieut.-Colonel Headlam): The answer to the first part of the question is in the negative. The question whether the Royal Naval Division Benevolent Fund is eligible for participation in any future distribution of the balance of the Naval Prize Fund will be considered; but, as at present advised, the Admiralty are inclined to think that the personnel dealt with by this benevolent fund is also covered by other larger funds.

Oral Answers to Questions — UNEMPLOYMENT.

BENEFIT (OLD-AGE PENSIONERS).

Mr. OLIVER: 51.
asked the Minister of Labour whether his attention has been called to the number of men of 65 years of age who have been discharged from their employment in consequence of receiving a pension of 10s. per week under the Widows', Orphans', and Old Age Contributory Pensions Act, 1925; and, in view of the fact that many of these men have paid into the Unemployed Insurance Fund for many years and would be entitled, if unemployed, to 24s per week for themselves and their wives, he will consider, particularly in cases where 10s a week only is drawn, as is the case where the wife has not attained the age of 65, the desirability of introducing legislation enabling a man of this age to exhaust his benefit under the Unemployment Insurance Act?

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Betterton): I have no information as to cases of this kind. The old age pension is, on the whole, a more valuable right for persons over 65 than unemployment benefit, and I cannot undertake to introduce legislation to substitute the latter for tilt% former in particular cases where it may happen to be more favourable, temporarily, to the claimant.

BENEFIT DISALLOWED.

Sir PARK GOFF: 52.
asked the Minister of Labour whether he is aware that a workman named Holness, engaged for 22 weeks out of 25 by the Corporation
of Redcar, has been declined unemployment benefit on the ground that he was not genuinely seeking work; that another workman named Place, who had 57 stamps for the past two years, has been similarly dealt with; and that a third workman named Campbell, with 38 stamps for the past two years, excluding the period during which he was on compensation, has also been informed that the chief insurance officer had refused his application; whether it is the settled policy of the Department to draw a distinction between work provided by corporations and that organised by private firms; and whether an inquiry will be instituted into these three cases with a view to seeing whether any injustice has been created by the refusal?

Mr. BETTERTON: The decision on these claims is a matter, not for the Department, but for the independent statutory authorities. I understand that the matter is still sub judice. I will let my hon. Friend know the final decision.

Sir P. GOFF: May I ask my hon. Friend what constitutes genuinely seeking work?

Mr. BETTERTON: That is the very question which the statutory authorities will have to decide.

Oral Answers to Questions — GOVERNMENT DEPARTMENTS.

MINISTRY OF PENSIONS.

Mr. DALTON: 53.
asked the Minister of Pensions whether the particulars upon which the cost of administration of the Ministry is stated to be 5d per £ of benefit include the sum provided for pensions of all ranks awarded for life; and, if so, what is the cost per £ of benefit, eliminating the sum provided for life pensions during 1920 and the current year?

The PARLIAMENTARY SECRETARY to the MINISTRY of PENSIONS (Lieut.-Colonel Stanley): The answer to the first part of the question is in the affirmative. I fear that it is not practicable to make the interesting distinction suggested in the second part of the question, since, even in the case of awards of life pension, some expenditure on current administration is necessarily involved—for example, in connection with the machinery of payment, the adjustment of allowances in accordance with
changes in family circumstances, the provision of treatment, and other matters—the cost of which cannot he separated.

MINISTRY OF HEALTH.

Mr. R. MORRISON: 54.
asked the Minister of Health how many junior clerks have commenced work in the Ministry during the past six months?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood): No new entrants of the junior clerical class have been recruited for my Department during the last six months. I may, however, add that 39 members of the ex-service "P" class clerks have been promoted within the Department to the permanent established clerical class.

Mr. MORRISON: 55.
asked the Minister of Health how many temporary ex-service clerks are at resent under notice in the Ministry; and what is the rate of discharge?

Sir K. WOOD: Two hundred and twenty-eight temporary ex-service clerks are at present under notice in my Department. In the case of 169 of these officers the notices do not take effect until the middle of June. Sixty-two officers have been discharged during the last six weeks, but the rate of discharge necessarily varies from week to week.

Mr. MORRISON: 56.
asked the Minister of Health whether overtime is still being worked in any of his Departments; and, if so, to what extent?

Sir K. WOOD: Seventy-nine members of the staff of my Department are at present employed on overtime, of whom 33 are messengers or typists, 24 are employed in regional and provincial offices, and 22 at headquarters.

Mr. SHINWELL: Will the right hon. Gentleman say why it is found necessary to dispense with the services of so many men when overtime is being worked in his Department?

Sir K. WOOD: Because, obviously, they are not engaged on the same class of work.

Mr. SHINWELL: Is it not possible for the right hon. Gentleman to consider
transferring men from one department to another when they are engaged on clerical work?

Sir K. WOOD: All these matters have been considered.

Mr. SHINWELL: If they have been considered, is it the policy of the Government to dispense with ex-service men who are employed by the Department without regard to their future prospects?

Sir K. WOOD: No, Sir.

Commander WILLIAMS: Has my right hon. Friend noticed that certain trade unions object to people being transferred from one class of job to another?

SALE OF FOOD AND DRUGS ACT.

Dr. VERNON DAVIES: 57.
asked the Minister of Health if the Sale of Food and Drugs Act is administered by the health authorities in any county, and, if so, in how many?

Sir K. WOOD: Yes, Sir. In some counties the Public Health Committee or the Medical Officer of Health, or both, take part in the administration of the Sale of Food and Drugs Acts. I regret that I cannot state the number of such counties.

HOUSING CONTRACTS (FAIR WAGES CLAUSE).

Captain CAZALET: 58.
asked the Minister of Health whether it is the practice of his Department in a contract, where a fair-wage clause is inserted, for the building of houses which have been subsidised from public funds, and in which the contracting party has paid less than the established district rates to his employés, to take any steps to compel the offending party to pay to his present and past employés who have been, or who are still, engaged upon, the specified work, such moneys as may be due to them as a result of past work being paid for at less than the specified district rates?

Sir K. WOOD: The Housing Act, 1924, lays down as one of the conditions of eligibility for subsidies under that Act that the local authority shall undertake that the contract for the erection of
houses shall contain a Fair Wages Clause. The enforcing of a contract between a local authority and one of its contractors is a matter entirely for the authority, and the action taken by the authority in the event of any breach of contract will depend upon the terms of the contract in the particular case.

Mr. MACKINDER: Are we to understand that the local authorities have taken no action, even where flagrant cases have occurred?

Sir K. WOOD: The Ministry has no power to do so, as it is not a party to the contract.

Mr. MACKINDER: Are we to understand that, where local authorities do not 'take any action, the Fair Wages Clause is of no value whatever?

Sir K. WOOD: No, Sir, that must not be understood.

Oral Answers to Questions — POST OFFICE.

CABLE SERVICE, LERWICK.

Sir R. HAMILTON: 59.
asked the Postmaster-General whether he is aware that one of the cables to Lerwick is interrupted; when it is intended to repair this cable; and what steps have been taken to meet a possible interruption of the remaining cable during the fishing season?

The ASSISTANT POSTMASTER-GENERAL (Viscount Wolmer): I am aware that one of the Lerwick cables is interrupted, and I am taking all possible steps to have it repaired. If the second Lerwick cable should go out of service, wireless communication would be established with as little delay as possible.

GOVERNMENT MESSAGES (RATES).

Captain GARRO-JONES: 60.
asked the Postmaster-General the cable and wireless communication rates for Government messages to and from Canada, Australia, New Zealand, and the Union of South Africa, respectively?

Viscount WOLMER: The rates for British Government telegrams to all parts of Canada are the same by cable and wireless, the rate to Ottawa being 4½d. a word. To Australia the rate is is. 0½d. a word by cable, and 10d. by the Post Office wireless service. To New
Zealand the rate is 1s by cable; no wireless service is available. To the Union of South Africa the rate is 10d by cable, and 8d by the Post Office wireless service. All these rates apply to Government telegrams in both directions.

Oral Answers to Questions — EDUCATION.

STATISTICS.

Mr. DAY: 61.
asked the President of the Board of Education the number of pupils on the register of elementary, special, and secondary schools at the last convenient date, giving the age and sex of the pupils, showing each classification separately?

The PARLIAMENTARY SECRETARY to the BOARD OF EDUCATION (Duchess of Athol): I would ask the hon. Member to await the publication of the volume of Educational Statistics for 1927, which will, I hope, be available to-morrow or the following day.

GIRLS' HIGH SCHOOL, DARLINGTON (JUNIOR DEPARTMENT).

Mr. SHEPHERD: 62.
asked the President of the Board of Education whether his attention has been drawn to the reported statement by the chairman of the Darlington Education Committee that, in the proposal to re-establish the preparatory department in the girls high school, the committee were carrying out recommendations of His Majesty's inspector contained in the last report of the school's inspection; whether this is in accordance with the present policy of the Board; and if the advice was given with the knowledge and approval of the Board?

Duchess of ATHOLL: My right hon. Friend's attention has not been called to the reported statement in question. The last report on the school contains no recommendation that the junior department should be revived. The only reference to the matter occurs incidentally in the section of the Report relating to the premises and accommodation of the school, and is to the effect that for the present the accommodation is quite adequate, and that, even if it were decided to revive the junior school in the present buildings, this would not necessitate any immediate extension of the premises.

Mr. SHEPHERD: Is the Noble Lady aware of any reason, other than that of snobbery, why these schools should be kept in being, seeing that the elementary schools do the work very much more successfully than any others?

Duchess of ATHOLL: I think that, it' the hon. Member discussed the question with the heads of secondary schools, he would find that frequently there are reasons other than the very inadequate one which he has suggested.

Mr. SHEPHERD: Is the Noble Lady aware that the matter has been discussed by the heads both of secondary schools and of elementary schools, and that one cannot get past examination results, which show that the elementary schools are better fitted for doing this work?

Mr. SPEAKER: That can be discussed on Wednesday.

ROYAL PARKS (PROSECUTIONS).

Mr. DAY: 63.
asked the Secretary of State for the Home Department whether it is proposed to hold an inquiry into the evidence that was given in a case heard at the Marlborough Street police court on Wednesday, 2nd May, wherein the magistrate ordered the police to pay the sum of 10 guineas costs?

The SECRETARY of STATE for the HOME DEPARTMENT (Sir William Joynson-Hicks): I am inquiring into the matter myself, and am unable to make any statement at present.

Mr. DAY: Will the right hon. Gentleman say whether there is going to be a public inquiry into this matter, and, if there is going to be an inquiry later, whether the police officers concerned will be represented?

Sir W. JOYNSON-HICKS: I cannot say more than I said on the last occasion. I am inquiring personally into the matter. I may decide that a prosecution is necessary, in which case, of course, the whole case will be inquired into, or I may decide that a public inquiry is necessary; but I have come to no conclusion.

NORTHERN IRELAND (SMALLHOLDINGS).

Mr. DAVID REID: 65.
asked the Home Secretary whether he can make any statement with regard to the position of
tenants in Northern Ireland whose holdings will not have been dealt with under The Northern Ireland Land Act, 1925, within four years of the passing of that Act?

Sir W. JOYNSON-HICKS: Yes, Sir. As the statement is somewhat long, I propose, with my honourable Friend's permission, to circulate it in the OFFICIAL REPORT. I have sent him a copy.

Following is the statement:

The number of holdings to be vested in the tenants under the Act has proved to be much greater than was anticipated when the Act was passed. For this and other reasons it will be impracticable to complete the process of transfer by the date originally contemplated, namely, May, 1929. The delay must be a source of disappointment to the tenants concerned, and I have been considering for some time past in close consultation with the Government of Northern Ireland what steps could be taken to mitigate its effects. I am glad to say that a scheme has now been worked out which should provide a satisfactory solution of the difficulties. Briefly its effect in the case of a tenant whose holding is transferred after May next is to place that tenant retrospectively in the financial position in which he would have been had the delay not occurred. He will continue to pay his rent to the landlord until the holding is vested in the Commission, but he will then receive a refund of the difference between the amount of the annuity ultimately payable to the Government and the current rent from May next. Furthermore, the term of the land purchase annuity will run as from May next. The Government of Northern Ireland have undertaken to bear the cost of the refund to the tenants and of the sinking fund payments during the interim period. The scheme will not, therefore, operate in any way to the prejudice of the landlords. The scheme will involve legislation of a simple and, I hope, entirely uncontroversial character. The work of vesting holdings in the Commission will be continued with all possible expedition and the outstanding cases will be progressively disposed of within a period of three years from the date mentioned, by which time, with certain possible exceptions which may present special difficulties, the completion of land purchase in Northern Ireland would be effected.

REX v. BROWNE AND KENNEDY.

Mr. WELLOCK: 66.
asked the Home Secretary whether Mr. Browne, a prisoner under sentence of death at Pentonville Prison, is allowed to be visited by his relatives; whether he has expressed a desire to see certain of his relatives; and on what grounds Mr. Finch, a brother-in-law, has been refused permission to visit Browne?

Sir W. JOYNSON-HICKS: Yes, Sir. Arthur Finch, the prisoner's brother-in-law, visited him on Thursday and Saturday last.

Mr. MAXTON: 69.
asked the Home Secretary if he is aware that the same person to whom the reward of £2,000 has been paid in connection with the Police-constable Gutteridge murder case wrote to the defending solicitor offering to give information for the defence at an early stage in the proceedings; and if he will make full inquiry into all the circumstances?

Sir W. JOYNSON-HICKS: An appeal is pending, and I regret that I cannot discuss matters connected with this case.

Mr. MAXTON: I regret if I am infringing the Rules applying to appeals in putting this question down. My reason for putting it is to ask whether the right hon. Gentleman will make full inquiries into all the circumstances affecting the getting of evidence for this case as they raise matters of grave concern.

Sir W. JOYNSON-HICKS: As a matter of fact, I have asked already for information about this matter, but I cannot give the hon. Member an answer here until the appeals have been decided.

Mr. HARDIE: How is it the newspapers can do all these things—offer money for evidence and discuss the thing all over—and the right hon. Gentleman cannot give an answer?

Sir W. JOYNSON-HICKS: I am restrained by certain considerations which affect the lives of these men, and perhaps the newspapers are not.

COLOURED SEAMAN (REPATRIATION).

Captain GARRO-JONES: 67.
asked the Home Secretary whether he is aware
that a British subject named John Zarlia, domiciled for over 10 years in this country, with a wife and family in Liverpool, was, upon arrival home from his last voyage, permitted to remain only 10 days with his family, and upon the expiry of this period deported on the s.s. "Abinsi" without being charged with any offence; and can he state the reason for this action?

Sir W. JOYNSON-HICKS: The man is a coloured seaman who, under the name John Momo, has been employed by Messrs. Elder Dempster and Company. There appears to be no evidence that he is a British subject. I understand that on the termination of his last voyage on 12th March the company decided to dispense with his services; and he was accordingly refused leave to land and the company were called upon to repatriate him at their own expense to West Africa.

Captain GARRO-JONES: What difference does it make whether he is a coloured seaman or not, and is it presumed against a seaman serving on a British ship that he is not a British subject unless otherwise proved?

Sir W. JOYNSON-HICKS: In reply to the first part of the question, there is, of course, a very obvious difference between a coloured seaman and another seaman. One is coloured and the other is not. In reply to the second part of the question, arrangements have long been in force to enable all coloured seamen' to have certificates of identity, if they are British subjects, in order that they should be treated accordingly. This man has no certificate, and there is no evidence at all that he is a British subject.

Captain GARRO-JONES: Is the right hon. Gentleman enabled under the Statute to deport a seaman serving on a British ship unless he brings evidence that he is a British subject?

Sir W. JOYNSON-HICKS: This man was not deported. He was on the ship. His employers stated that they did not want him any longer. In order that he should not possibly become a charge here, he was refused leave to land, and the employers were compelled to repatriate him to his own home country at their own expense.

SUBVERSIVE PROPAGANDA (RUSSIAN MONEY).

Sir W. DAVISON: 68.
asked the Home Secretary whether, as the result of his further inquiries, he can now give the House any further information with regard to the receipt in this country of funds from Russian Soviet sources for subversive propaganda; and whether he is satisfied that Russian money is no longer coming to this country for this purpose?

Sir W. JOYNSON-HICKS: My inquiries are still continuing, and for the present I have no statement to make.

Sir W. DAVISON: Has the right hon. Gentleman seen in the inquiry recently held that five tons of gold were imported from Russia?

Sir W. JOYNSON-HICKS: Perhaps I may go so far as to say inquiries are being carefully conducted, and I hope to be able to make a statement before long.

Mr. A. V. ALEXANDER: Is the Russian Bank giving the right hon. Gentleman full facilities?

Sir W. JOYNSON-HICKS: Oh, yes, absolutely.

Oral Answers to Questions — TRANSPORT.

UNDERGROUND ELECTRIC LINES.

Mr. TREVELYAN: 72.
asked the Minister of Transport if he can give any estimate of the increased cost of putting electric lines underground through small country towns as compared with carrying the lines overhead?

The MINISTER of TRANSPORT (Colonel Ashley): The cost of underground lines depends upon a number of varying factors, such as the pressure of the supply, the type and size of the cables employed, the method of laying and the cost of excavation and reinstatement of the particular classes of roads in which the cables are laid. For the various classes of lines likely to be used in the development of electricity supply in country towns, the cost of underground construction might represent an increase of from 150 to 200 per cent., or even more, cn the cost of overhead construction, according to the particular conditions.

TRAFFIC ADVISORY COMMITTEE.

Mr. E. BROWN: 73.
asked the Minister of Transport if he will state on how many occasions in the past four years he has rejected the advice of the London and Home Counties Traffic Advisory Committee, and on what issues?

Colonel ASHLEY: No, Sir. The committee is an advisory body and the responsibility for any action taken rests entirely with the Minister.

Mr. BROWN: On how many occasions has the right hon. Gentleman rejected their advice?

Colonel ASHLEY: No, I am not answering that question. I say the responsibility for taking the advice rests with the Minister and with no one else.

Captain GARRO-JONES: Is it true that when this Traffic Advisory Body recently submitted a Report to the right hon. Gentleman he sent it back for alterations?

Colonel ASHLEY: No, Sir.

PRINCE CAROL OF RUMANIA.

Lieut. - Commander KENWORTHY: (by Private Notice) asked the Home Secretary whether he can make any further statement regarding the date of Prince Carol's departure from this country?

Sir W. JOYNSON-HICKS: Yes, Sir. I have received a definite undertaking from Monsieur Jonescu, on behalf of his guest, that Prince Carol will leave this country by Thursday next, the 17th instant, at the latest.

CURRENCY AND BANK NOTES BILL.

Mr. MAXTON: May I ask regarding the business for to-day, if the Bill to confer powers on the Bank of England is to be treated as a public Bill or, as a previous Bill affecting the Bank of England was, as a hybrid Bill and subject to the procedure affecting hybrid Bills?

Mr. SPEAKER: I have looked at the Bill down for consideration. There is nothing in the Bill which would lead me to suppose that it ought to go to the
examiner. The hon. Member wishes to ask, I suppose, this question, recollecting a certain Bill of two years ago.

Mr. MAXTON: As I read the definition of a Private Bill, this Bill falls in exactly the same category as the previous Bill I am referring to, the Bill to nationalise the Bank of England, except that that proposed to take rights away from the Bank of England whereas this is a Bill to confer rights on the Bank of England. As I understand the Standing Orders, the conferring of rights and the taking away of rights are in exactly the same category as far as the Standing Order is concerned, and I ask you, Sir, having regard to that Standing Order, if it is not the proper procedure that proper steps should be taken with regard to advertising and the summoning of witnesses and the other procedure that applies to hybrid Bills?

Mr. SPEAKER: No, I do not think so at all. The purpose of the Standing Order is that any person who may possibly be damnified has an opportunity of being heard. I cannot see that there is anything in this Bill that proposes to take away any private rights.

Mr. MAXTON: Will you allow me, Sir, to read the Standing Order which seems to me to apply?
To confer rights on or relieve from liability some particular person or body of persons.
Is the purpose of the Bill not to confer rights on the Bank of England?

Mr. SPEAKER: The Bill seems to give duties rather than rights. The hon. Member has given me no notice that he was going to raise the question.

Mr. HARDIE: Is it not a fact that the Bill, if carried, will give an increased income to members of the Bank of England and shareholders?

Mr. MAXTON: I apologise for not giving notice of this question. I assumed because of the previous discussion on the matter that you would be fully conversant with the situation and that notice was unnecessary. I should be greatly obliged, in the interests of the procedure of the House, if you would look further into the matter?

Mr. SPEAKER: I think I am conversant with the Bill, but if the hon. Member can suggest any new points, he may put them before me.

BUSINESS OF THE HOUSE.

Mr. SNOWDEN: Can the Prime Minister say what Estimates will be taken on Wednesday, and what the business will be on Friday?

The PRIME MINISTER: I am sorry I cannot yet say about Friday, but on Wednesday we shall put down the Board of Education Vote.

Motion made, and Question proposed,
That the proceedings on the Currency and Bank Notes Bill and on the Bankers (Northern Ireland) Bill be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]

Mr. THURTLE: On a point of Order. May I submit that there are two questions involved in this Motion, and ask whether two Divisions or only one Division will be taken?

Mr. SPEAKER: No, only one. The business specified under the Standing Order may include two or more Bills, and sometimes it includes some other Government business.

Question put.

The House divided: Ayes, 204; Noes, 94.

Division No. 121.]
AYES.
[3.50 p.m.


Acland-Troyte, Lieut.-Colonel
Benn, sir A. S. (Plymouth, Drake)
Bull, Rt. Hon. Sir William James


Agg-Gardner, Rt. Hon. Sir James T.
Bennett, A. J.
Bullock, Captain M.


Albery, Irving James
Berry, Sir George
Burton, Colonel H. W.


Alexander, E. E. (Leyton)
Betterton, Henry B.
Carver, Major W. H.


Amery, Rt. Hon, Leopold C. M. S.
Bird, E. R. {Yorks, W. R., Skipton)
Cautley, Sir Henry S.


Applin, Colonel R. V. K.
Blades, Sir George Rowland
Cazalet, Captain Victor A.


Apsley, Lord
Bourne, Captain Robert Croft
Cecil, Rt. Hon. Sir Evelyn (Aston)


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Bowater, Col. Sir T. Vansittart
Chamberlain, Rt. Hn. Sir J. A. (Birm., W)


Astor, Maj. Hn. John J. (Kent, Dover)
Bowyer, Captain G. E. W.
Chapman, Sir S.


Atholl, Duchess of
Braithwaite, Major A. N.
Charteris, Brigadier-General J


Baldwin, Rt. Hon. Stanley
Brass, Captain W.
Churchman, Sir Arthur C.


Balniel, Lord
Bridgeman, Rt. Hon. William Clive
Cobb, Sir Cyril


Barclay-Harvey, C. M.
Briscoe, Richard George
Cochrane, Commander Hon. A. D.


Barnett, Major Sir Richard
Brocklebank, C. E. R.
Coben, Major J. Brunel


Beckett, Sir Gervase (Leeds, N.)
Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Cooper, A. Duff


Cope, Major William
Iliffe, Sir Edward M.
Russell, Alexander West (Tynemouth)


Couper, J. B.
Inskip, Sir Thomas Walker H.
Salmon, Major I.


Courtauld, Major J. S.
Iveagh, Countess of
Samuel, A. M. (Surrey, Farnham)


Culverwell, C. T. (Bristol, West)
James, Lieut.-Colonel Hon. Cuthbert
Sandeman, N. Stewart


Curzon, Captain Viscount
Jones, Sir G. W. H. (Stoke New'gton)
Sanders, Sir Robert A.


Dalkeith, Earl of
Joynson-Hicks, Rt. Hon. Sir William
Sandon, Lord


Davies, Maj. Geo. F. (Somerset, Yeovil)
King, Commodore Henry Douglas
Sassoon, Sir Philip Albert Gustave D.


Davies, Dr. Vernon
Kinloch-Cooke, Sir Clement
Savery, S. S.


Davison. Sir W. H. (Kensington, S.)
Lamb, J. Q.
Shaw, Lt.-Col. A. D. Mcl. (Renfrew. W)


Dean, Arthur Wellesley
Locker-Lampson, G. (Wood Green)
Sheffield, Sir Berkeley


Drewe, C.
Loder, J. de V.
Simms, Dr. John M. (Co. Down)


Eden, Captain Anthony
Looker, Herbert William
Skelton, A. N.


Edmondson, Major A. J.
Luce, Maj.-Gen. Sir Richard Harman
Smith, R. W. (Aberd'n & Kinc'dine, C.)


Edwards, J. Hugh (Accrington)
Lumley, L. R.
Smith-carington, Neville W.


Elliot, Major Walter E.
MacAndrew, Major Charles Glen
Somerville, A. A. (Windsor)


Ellis, R. G.
McLean, Major A.
Spender-Clay, Colonel H.


Erskine, Lord (Somerset, Weston-s.-M.)
Macnaghten, Hon. Sir Malcolm
Stanley, Lieut.-Colonel Rt. Hon. G. F.


Fairfax, Captain J. G.
Maitland, A. (Kent, Faversham)
Stanley, Lord (Fylde)


Falle, Sir Bertram G.
Makins, Brigadier-General E.
Steel, Major Samuel Strang


Falls, Sir Charles F.
Manningham-Buller, Sir Mervyn
Streatfeild, Captain S. R.


Fanshawe, Captain G. D.
Margesson, Captain D.
Stuart, Hon J. (Moray and Nairn)


Fermoy, Lord
Marriott, Sir J. A. R.
Styles, Captain H. W.


Forrest, W.
Meller, R. J.
Sueter, Rear-Admiral Murray Fraser


Foster, Sir Harry S.
Meyer, Sir Frank
Sugden, Sir Wilfrid


Foxcroft, Captain C. T.
Milne, J. S. Wardlaw-
Thorn, Lt.-Col. J. G. (Dumbarton)


Fraser, Captain Ian
Mitchell, S. (Lanark, Lanark)
Thomson, Rt. Hon. Sir W Mitchell-


Frece, Sir Walter de
Mitchell, W. Foot (Saffron Walden)
Titchfield, Major the Marquess of


Ganzoni, Sir John
Mitchell, Sir W. Lane (Streatham)
Tryon, Rt. Hon. George Clement


Gates, Percy
Moore, Lieut.-Colonel T. C. R. (Ayr)
Vaughan-Morgan, Col. K. P.


Gilmour, Lt.-Col. Rt. Hon. Sir John
Moore, Sir Newton J.
Wallace, Captain D. E.


Glyn, Major R. G. C.
Morrison-Bell, Sir Arthur Clive
Ward, Lt.-Col. A. L.(Kingston-on-Hull)


Goff, Sir Park
Murchison, Sir Kenneth
Warner, Brigadier-General W. W.


Grace, John
Nelson, Sir Frank
Warrender, Sir Victor


Graham, Fergus (Cumberland, N.)
Newman, Sir R. H. S. D. L. (Exeter)
Watson, Rt. Hon. W. (Carlisle)


Grant, Sir J. A.
Nicholson, O. (Westminster)
Wells, S. R.


Grattan-Doyle, Sir N.
Nicholson, Col. Rt. Hn. W. G. (Ptrsf'ld.)
White, Lieut.-Col. Sir G. Dairymple-


Grenfell, Edward C. (City of London)
Nield, Rt. Hon. Sir Herbert
Williams, A. M. (Cornwall, Northern)


Guinness, Rt. Hon. Walter E.
Nuttall, Ellis
Williams, Com. C. (Devon, Torquay)


Hacking, Douglas H.
Oakley, T.
Williams, Herbert G. (Reading)


Hall, Lieut.-Col. Sir F. (Dulwich)
Penny, Frederick George
Windsor-Clive, Lieut.-Colonel George


Hall, Capt. W. D A. (Breton & Rad)
Perkins, Colonel E. K.
Winterton, Rt. Hon. Earl


Hammersley, S. S.
Peto, Sir Basil E. (Devon, Barnstaple)
Wolmer, Viscount


Hanbury, C.
Peto, G. (Somerset, Frome)
Womersley, W. J


Harrison, G. J. C.
Power, Sir John Cecil
Wood, B. C. (Somerset, Bridgwater)


Hartington, Marquess of
Pownall, Sir Assheton
Wood, E, (Chest'r, S[...]alyb'ge & Hyde)


Harvey, Major S. E. (Devon, Totnes)
Ramsden, E.
Wood, Rt. Hon. Sir Kingsley


Haslam, Henry C.
Reid, D. D. (County Down)
Wood, Sir S. Hill- (High Peak)


Headlam, Lieut-Colonel C. M.
Remnant, Sir James
Woodcock, Colonel H. C.


Henderson, Lieut.-Col. Sir Vivian
Rhys, Hon. C. A. U.
Worthington-Evans, Rt. Hon. Sir L.


Heneage, Lieut.-Col. Arthur P.
Rice, Sir Frederick
Yerburgh, Major Robert D. T.


Hilton, Cecil
Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Young, Rt. Hon. Sir Hilton (Norwich)


Hopkins. J. W. W.
Rodd, Rt. Hon. Sir James Rennell



Howard-Bury, Colonel C. K.
Ropner, Major L.
TELLERS FOR THE AYES.—


Hurd, Percy A.
Ruggles-Brise, Lieut.-Colonel E. A.
Major Sir George Hennessy and




Mr. F. C. Thomson.


NOES.


Adamson, W. M. (Staff., Cannock)
Griffith, F. Kingsley
Malone, C. L'Estrange (N'thampton)


Alexander, A. V. (Sheffield, Hillsbro')
Groves, T.
March, S.


Ammon, Charles George
Grundy, T. W.
Maxton, James


Attlee, Clement Richard
Hall, F. (York, W.R., Normanton)
Montague, Frederick


Baker, J. (Wolverhampton, Bilston)
Hall, G. H. (Merthyr Tydvii)
Morris, R. H.


Baker, Walter
Hamilton, Sir R. (Orkney & Shetland)
Morrison, R. C. (Tottenham, N.)


Barker, G. (Monmouth, Abertillery)
Hardie, George D.
Naylor, T. E.


Barnes, A.
Hartshorn, Rt. Hon. Vernon
Oliver, George Harold


Barr, J.
Henderson, Right Hon. A. (Burnley)
Palin, John Henry


Batey, Joseph
Hirst, G. H.
Paling, W.


Briant, Frank
Hirst, W. (Bradford, South)
Pethick-Lawrence, F. W.


Broad, F. A.
Hore-Belisha, Leslie
Potts, John S.


Brown, Ernest (Leith)
Hutchison, Sir Robert (Montrose)
Richardson, R. (Houghton-le-Spring)


Charleton, H. C.
John, William (Rhondda, West)
Rose, Frank H.


Cluse, W. S.
Johnston, Thomas (Dundee)
Runciman, Rt. Hon. Walter


Cowan, D. M. (Scottish Universities)
Kelly, W. T.
Saklatvala, Shapurji


Crawfurd, H. E.
Kennedy, T.
Salter, Dr. Alfred


Dalton, Hugh
Kenworthy, Lt.-Com. Hon. Joseph M
Scrymgeour, E.


Day, Harry
Lansbury, George
Shepherd, Arthur Lewis


Duncan, C.
Lee, F.
Shiels, Dr. Drummond


Garro-Jones, Captain G. M.
Lindley F. W.
Shinwell, E


Gibbins, Joseph
Lowth, 'T.
Short, Alfred (Wednesbury)


Gillett, George M.
MacDonald, Rt. Hon. J. R. (Aberavon)
Simon, Rt. Hon. Sir John


Graham, Rt. Hon. Wm. (Edin., Cent.)
Mackinder, W.
Smith, Ben (Bermondsey, Hotherhithe)


Greenwood, A. (Nelson and Colne)
MacNeill-Weir, L.
Smith, H. B. Lees- (Keighley)


Grenfell, D. R. (Glamorgan)
Macpherson, Rt. Hon. James I.
Smith, Rennie (Penistone)




Snell, Harry
Trevelyan, Rt. Hon. C. P.
Wright, W.


Snowden, Rt. Hon. Philip
Viant, S. P.
Young, Robert (Lancaster, Newton)


Stephen, Campbell
Wallhead, Richard C.



Strauss, E. A.
Webb, Rt. Hon. Sidney
TELLERS FOR THE NOES.—


Thurtle, Ernest
Wellock, Wilfred
Mr. Charles Edwards and Mr. Whiteley.


Tinker, John Joseph
Wilkinson, Ellen C.



Townend, A. E.
Windsor, Walter

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE C.

Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Members from Standing Committee C (added in respect of the Agricultural Produce (Grading and Marking) Bill [Lords]): Brigadier-General Sir Henry Croft and Captain Gunston; and had appointed in substitution: Mr. Dean and Mr. Hugh Morrison.

Report to lie upon the Table.

CHAIRMEN'S PANEL.

Mr. William Nicholson reported from the Chairmen's Panel; That they had appointed Sir Robert Sanders to act as Chairman of Standing Committee C (in respect of the Rabbits Bill).

Report to lie upon the Table.

ADMINISTRATION OF JUSTICE BILL [Lords].

Read the First time; to be read a Second time upon Wednesday, and to be printed. [Bill 129].

Orders of the Day — CURRENCY AND BANK NOTES BILL.

Order for Second Reading read.

The FINANCIAL SECRETARY to the TREASURY (Mr. Arthur Michael Samuel): I beg to move, "That the Bill be now read a- Second time."
4.0 p.m.
This Bill proposes, in accordance with the policy laid down by my right hon. Friend the Chancellor of the Exchequer in his Budget speech, to give effect to the long foreshadowed amalgamation of the Treasury currency note with the Bank of England note. The House will not wish that I should trace at any length the past history of our banking conditions. The House is aware that the Bank of England issue for 70 years before the War, from 1844 to 1914, was governed by the provisions of Peel's Bank Charter Act of 1844. The basis of that Act was that it established a fixed fiduciary issue, beyond which no notes could he issued except in exchange for gold. With the outbreak of War, however, face to face with a catastrophe and difficulties of unforeseeable magnitude, it was necessary for us to abandon temporarily, and, as time has proved, fortunately only temporarily, some of the most vital principles of the 1844 Act. May I refer to some of the vital principles which had to be abandoned? In the first place, the paper currency, which in England and Wales was limited, up to the outbreak of War, to Bank of England notes of£5 and upwards, was, at the outbreak of War, supplemented by an issue of £1 and 10s. currency notes. There was no statutory regulation as to the amount of the issue, nor was there any statutory provision as to the gold reserves to be held against those notes. Secondly, power was given to the Treasury to suspend temporarily the fiduciary limit of the Bank of England notes. The gold standard itself was maintained in operation until the end of the War. But gold movements were so hampered, and the world market in gold so disordered, that the gold standard had ceased to work. In 1919, the export of gold was prohibited; that prohibition
was prolonged until 1925. But it has been all along the policy of His Majesty's Government to restore the whole organisation of credit—an organisation which had been temporarily impaired by the War—at the earliest possible moment.
The action of my right hon. Friend the Chancellor of the Exchequer brought us back to gold in 1925 by the Gold Standard Act. It now only remains for us to take the final administrative step which he foreshadowed in 1925, and we propose to amalgamate the Treasury currency notes with the Bank of England note issue. I will, later on in my remarks, if the House will grant me its patience, say a few words about the Clauses of the Bill, and the manner in which provision is made for variations in the tide of commerce. But, perhaps, it might be acceptable to the House if I were to turn aside for a moment and endeavour to answer a question which may possibly rise to the minds of hon. Members. It may -be asked, why not leave the Treasury note as it is, or, if not, why amalgamate it with the Bank of England note issue? I will try to give the reasons why the Treasury notes ate to be handed over to the Bank. The existing system of our paper currency is the outcome of the emergency of 1914. But certain wide powers then given by Parliament to the Treasury are no longer used. The Treasury was empowered by law to issue and control the Treasury currency notes. As a matter of fact, only the Bank of England issue these notes, and they can only be obtained by drawing upon a deposit at the Bank of England. There was an alternative method, which was necessary at the crisis in the early part of the War, namely, that of direct advances from the Treasury to banks. That method, however, soon fell into abeyance, and in 1919 was abrogated.
Then, again, the Treasury Minute of December, 1919, limited the fiduciary issue in accordance with the recommendations of the Cunliffe Committee. Thus the actual maximum reached one year became the allowed maximum for the next. This was avowedly a transitory measure. Consequently the law governing the currency notes was unsatisfactory in itself, although the practice was good and sound. As neither the law nor the practice has any claim to remain permanent, we seek to regularise the mat-
ter, and therefore bring in this Bill. There are further reasons. As I have already explained, currency notes can only be obtained by drawing on deposits at the Bank of England. Consequently, the position is that the regulation of the volume of the currency has been dependent upon—and solely dependent upon—the regulation of credits. Now the regulation of credit has rested with the Bank of England. It must rest with the Bank of England, and will continue to rest with the Bank of England.

Mr. MAXTON: Why?

Mr. SAMUEL: Perhaps the hon. Member will allow me to pursue my argument. This is a very complex matter, and if I lose the thread, it will probably make my meaning obscure. The Bill merely proceeds to the logical conclusion. It places the legal responsibility for the note issue where the actual responsibility already lies, and must continue to lie, with the Bank of England, because the Bank of England controls credit. Even in 1844 the desirability of central control over the note issue was recognised. If hon. Members will turn to the splendid speech of Sir Robert Peel on 6th May, 1844, they will sec that this desirability of placing the note issue under the control of a central bank was dealt with on that occasion. I have had great pleasure myself last week re-reading that Bank Charter Debate before making my speech to-day. It was recognised, as I say, as long ago as 1844, that the note issue should be in the hands of a central bank, and one may say that the Bank of England was the first of all central banks.
Since the American crisis of 1907, this principle of central control has been more widely accepted, and the American Federal Reserve Act, 1913, was based upon that principle. Since then we have had the Brussels Conference of 1920 and the Genoa Conference of 1922. Both of these conferences emphasised the desirability of placing the control of currency and credit in the hands of central banks. Both recommended that central banks should be made completely independent of political interference. This Bill, which I have the privilege to introduce, recognises those principles. Before I pass from the reasons why we are entrusting the currency note issue to the Bank of England, I hope the House will give me permission to read a passage out of that
Bank Charter speech of Sir Robert Peel—one of the most celebrated speeches ever delivered in the House of Commons. He said on 6th May, 1844—there had been negotiations on the subject with the Bank of England—
I must, in justice to the gentlemen who have conducted negotiations on the part of the Bank, namely, the governor and deputy governor, declare that I never saw men influenced by mare disinterested or by more public-spirited motives than they have evinced through our communications with them. They have reconciled their duties as managers of a great instition bound to consult the interests of the proprietors, with enlightened and comprehensive views of the public interest.
Although nearly a century has elapsed since those words were spoken, there have been occasions time after time which have proved their complete truth. No man who has studied the economic development of Britain during the 19th century can have failed to notice the position which the Bank of England has established for itself in the respect of the nation. The country is very proud of the Bank of England. It is with complete confidence that His Majesty's Government have decided by this Bill to entrust the management of the currency note issue to it. But while the Bank of England must assume responsibility for the currency, Parliament, in legislating, as it is now, on the subject of currency, lays down the principles which will guide the Bank of England in carrying out its duties. One such principle is absolutely beyond all dispute. Convertibility into gold in accordance with the Gold Standard Act., 1925, must be maintained. The credit policy of the Bank must always be governed by this obligation. This principle is essential. Circumstances to-day are in several respects very different from those which obtained during the period of 70 years up to the outbreak of war. The fiduciary issue of the Bank of England, which is now £19,750,000, could hardly have remained so low as it did in the 70 years before the War but for the growth of the use of the cheque. The effect of the enormous economic and financial growth of the country upon the active circulation of bank notes was offset by the growth of the cheque. But it is not certain that the need for an increase in currency will always be met so adequately by other developments of banking methods.
A further new circumstance is this. It is now generally recognised that no country can either absorb or set free gold for monetary purposes without affecting its neighbours. A purely fixed note issue might fetter the Bank of England in a manner inconsistent with the resolutions adopted at the Genoa Conference in 1922. We are keeping the resolutions of the Genoa Conference well in mind together with the two considerations of (a) natural alterations in the currency needs of the community, and (b) the adaptation of our reserve limits to the state of the world markets in gold and gold currency.
Consequently provision is made in the Bill for variations in the fiduciary issue, either downward or upward, by the action of the Treasury, at the instance of the Bank. By variations upwards I mean of course expansion, and by variations downwards I mean reduction. Variations downwards are authorised because they may be needed to enable the country to absorb an abnormal inflow of gold without the evils of an excessive expansion of credit. It will be authorised under the Bill to vary downwards by permission of the Treasury acting at the instance of the Bank of England, and the Treasury can impose limits as to extent and period. Variations upwards of the fiduciary issue cannot he authorised for more than six months at a time, and they cannot be renewed to cover a total period of more than two years, without the direct authority of Parliament. To sum up, the existing emergency system has lasted long enough. It will make way in future under this Bill for a fixed fiduciary issue variable upwards only on good cause by the Bank and the Treasury acting in unison. The ultimate word will rest with Parliament. In this manner we seek to obtain the advantages without incurring the dangers of elasticity.
I have dealt with the transfer of the legal responsibility for the note issue to the Bank and the provision for a fixed fiduciary issue, subject to variation, by the joint action of the Bank and the Treasury. May I now proceed to explain the Bill?

Mr. MAXTON: I have been following the argument of the hon. Member very closely and I am anxious to learn all there is to be learned on this somewhat
complicated subject. Will he explain to me, having regard to his statement that the last word will lie with Parliament, how the banking system then is free of the political control which in an earlier period of his speech he insisted upon as necessary?

Mr. SAMUEL: That point is dealt with by one of the Clauses in the Bill. If the hon. Member will turn to Clause 8, he will see there that that question is partly answered.

Miss WILKINSON rose—

Mr. SAMUEL: Will the hon. Member allow me to proceed? It is a very difficult matter, and in moving the Second Reading I am desirous of giving a full explanation. The hon. Member will have an opportunity later to ask questions. At the present time, the Bank of England has no power to issue notes of a smaller denomination than £5. Clause 1 empowers the Bank to issue notes of and 10s. and makes bank notes legal tender for all payments in England instead of only for payments of £5 and over. It also makes the £1 and 10s. notes legal tender in Scotland and Northern Ireland, as well as in England and Wales. Sub-section (3) provides that so long as the Gold Standard Act remains in operation, the new notes for and 10s. will be legal tender in payments by the Bank itself. The Gold standard Act relieved the Bank from any obligation to pay in gold coin but required it to sell gold bullion at the coinage price. In order that that arrangement may continue in force, the Bank must have the same right to pay its depositors and creditors in its own notes as it now has to pay them in currency notes.
Clause 2, which is probably the most difficult Clause in the Bill to explain, defines the future fiduciary note issue and fixes it at £260,000,000. This £260,000,000 is arrived at in this way: following the recommendations of the Cunliffe Report, the Treasury has fixed the actual maximum of 1927 to be the permitted maximum fiduciary issue of currency notes for 1928. The maximum of 1927 was £244.94 millions. To that should be added the Bank of England fiduciary note issue of £19.75 millions. The total is thus £264.69 millions. The amount of our currency notes in use in the Irish Free State is estimated,
roughly, at £6,000,000. The Free State is about to replace our notes by an issue of Free State notes; therefore, £6,000,000 should be deducted from our total. That reduces our total to £258.69 millions, which has been rounded up to £260,000,000, the figure in the Bill. The Clause proceeds to give power to the Treasury, at the request of the Bank, to reduce the fiduciary issue. In Clause 8, power is given to increase the fiduciary issue.
Clause 3 deals with the cover for the fiduciary issue. It requires the Bank to hold securities in the Issue Department sufficient to cover the fiduciary issue. Up to a limit of £5,500,000 it allows silver coin, which has for some years been held in the Currency Note Account, to be held as a security. The limit is fixed with reference to the amount of silver now held by the Currency Note Redemption Account. The figure has come down from £7,000,000 to £5,500,000 and is in course of constant reduction, which will continue. Clause 4 provides for the transfer to the Bank of the responsibility for the currency notes outstanding on the appointed day. Clause 5 provides for the transfer of the securities held against the outstanding notes. As the securities held in the Currency Note Redemption Account exceed by a good margin the value of notes outstanding, provision is made for the disposal of the balance. The Clause directs that they be realised and the proceeds, estimated at £13,200,000, paid into the Exchequer, in conformity with the announcement made by my right hon. Friend in his Budget speech.
Clause 6 provides that the whole profits of the issue, both the profits on the new £1 and 10s. notes and the profits on the notes for £5 and upwards issued by the Bank of England shall accrue to the State. In Clause 8 power is given to increase the fiduciary note issue. Clause 8 (3) provides that:
Any minute of the Treasury authorising an increase of the fiduciary note issue … shall be laid forthwith before both Houses of Parliament.
The remaining Clauses, except Clause 11, deal with subsidiary matters. Clause 11 has been framed for the purpose of ensuring the concentration of the gold reserves of the country in the hands of the Bank of England. The Clause enables the Bank to buy any holding of gold coin
or bullion in excess of £10,000 compulsorily, with the important exception of gold
which is bona-fide held for immediate export or which is bona-fide required for industrial purposes.
This exception is devised to leave the activities of the London bullion market entirely untouched. Such are the provisions of the Bill. It returns to the principles of the Bank Act of 1844, but by the use of methods more adjustable to the needs of change and development. The whole essence of the Bill is recognition of the vital importance of providing the nation with an adequate volume of currency, and of maintaining its value stable. No State can exist and remain solvent, and least of all a State like ours which depends for its livelihood upon overseas trade, without a safe, stable currency. The measuring rod of commerce must be stable. In our case the measuring rod is the pound sterling, which has already been linked to gold by the Gold Standard Act of 1925. It has, however, been proved that the internal circulation of gold coins is in these times both unnecessary and wasteful. This Bill, therefore, will lay down for the Bank of England limits and safeguards subject to which it may issue notes to replace and represent gold coins for internal circulation. The return to gold has been a potent factor in the restoration of British international credit—

Mr. BATEY: It has done a lot of harm.

Mr. SAMUEL: Marked though it has been by economic jolts and jerks, it has, on the whole, been beneficial for us.

Mr. BATEY: It has been bad for the miners.

Mr. SAMUEL: It is evident on all sides that the trade of the country is steadily and surely on the upward grade. It needs a stable currency to support it. The restoration of the national wealth destroyed by the War and the refilling of the reservoir of capital by savings so indispensable to industrial recovery will be assisted by the provisions of this Bill, following on the return to gold. I can, therefore, with confidence, recommend its favourable acceptance by the House.

Mr. SNOWDEN: I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the words:
this House cannot assent to the Second Reading of a Bill amending the Law relating to currency and bank notes and transferring to the Bank of England the issue of currency notes in the absence of any policy for putting into operation the resolutions of the International Conference held at Genoa in 1922, and until an investigation has been made into the constitution, powers, and policy of the Bank of England in the light of modern developments in finance and industry.
The hon. Gentleman has devoted the greater part of his speech to an explanation of the provisions of the Bill, but that part of his speech which was not so concerned would have been much more appropriate if delivered in support of the Amendment than in defence of the provisions of the Bill. The question of currency and credit is undoubtedly one of great importance and the House of Commons has not many opportunities of discussing these abstruse and difficult problems. We are submitting our Amendment in order to give the House an opportunity for a frank consideration of these matters. The vital importance of credit and currency are, I think, being increasingly recognised, but, there is no subject upon which there is such a wide difference of opinion, so many theories, and upon which even experts hold such diverse views. The last thing we wish to do is to make this a party question or to throw the controversy into the cockpit of political conflict. It will be noted that our Amendment does not express any opposition to the amalgamation of the notes issue. There are obvious advantages in that, but we submit that there are two conditions, and very important conditions, which should be fulfilled precedent to an amalgamation of the note issues. These two conditions are the implementing in full of the Genoa Conference Resolutions and a review of the position of the Bank of England in view of modern financial conditions. I will deal with the latter of these two points first.
Our demand is in no sense a censure upon the Bank of England. Speaking with what knowledge I may possess, I believe that the Bank of England discharges its great powers and functions with a full sense of its great public
responsibilities. The Governor of the Bank of England is a man who is universally respected and trusted. Europe is now happily emerging from the state of economic and financial chaos which followed the War, and no man has done more towards the rehabilitation of the financial life of Europe than the Governor of the Bank of England. His work in this respect will probably never be fully known or acknowledged, but it has been inestimable. But the Bank of England is hampered by an archaic constitution which is not fitted to deal with modern financial conditions and the needs of industry, and we think the time has come when this constitution should be reviewed in the light of modern needs and modern conditions. This demand for a review of the Bank Charter is by no means confined to credit and currency cranks. There is a vast amount of financial and commercial support for it, from people who certainly do not hold the views, or many of the views, which we hold upon economic questions. The late chairman of the Westminster Bank a few days before he died wrote these words:
When the time comes for the issue system to be placed on a sound footing by the transfer of the present Note issue to the Bank of England and the consequent entire remodelling of the Bank Charter Act it will have to be on lines similar to those which have received such a volume of approval from all the chief banking experts of the world.
We see that Dr. Leaf took it as a matter of course that before Parliament was asked to agree to the amalgamation of the issues there would be an entire remodelling of the Bank Charter Act of 1844, and hon. Members will know that Mr. McKenna, the chairman of the Midland Bank, a man whom the Prime Minister was very anxious to make Chancellor of the Exchequer in a Conservative Government, has repeatedly within the last few years expressed views in agreement with those stated by Dr. Leaf. The Secretary of State for War, who I believe is going to take part later in this Debate, was at the Genoa Conference and he came back full of enthusiasm in regard to its Resolutions. I am not quite sure that he did not say that they had established a new Justinian Code. Therefore, in asking for an inquiry into the Bank Charter and for a review of the present functions and powers of the
Bank of England, we have very high financial authority to support us. The Financial Secretary, in moving the Second Reading of this Bill, made a reference to the Report of the Cunliffe Committee. The Government of the day evidently considered that the time had come when such an inquiry should be made into the functions of the Bank of England, for some time after the Committee had been appointed, and while it was still at work, its terms of reference were extended by the insertion of these words:
To consider the working of the Bank Charter Act, 1844, and the constitution and functions of the Bank of England with a view to recommending any alteration which appears to thorn to be necessary or desirable.
That is precisely what we are asking this afternoon. We are asking for what the Government ten years ago regarded at that time to be an urgent need. The Cunliffe Committee never went into this part of their terms of reference beyond making a suggestion that when the amalgamation took place there might be some change in the form of the weekly bank return. The need for this inquiry arises from the revolutionary changes which have taken place in banking methods, and in industry, during the last 80 years. Conditions have wholly changed since 1844. Private banks hate practically disappeared and huge joint stock banks now conduct the whole of the commercial business of the country. As the Financial Secretary has pointed out, the greatest change of all in its effect upon credit and currency, is the introduction of the widespread issue of the cheque system. Eighty years ago the questions of currency and credit were very little understood. The banking system was hardly developed outside this country. As far as the world was influenced by world price levels it was largely under the control of this country. International trade and international finance were in their infancy.
In those days, when the Bank Charter Act was passed, under which the operations of the Bank of England are conducted, the working of the central bank system was infinitesimal compared with its world-wide ramifications of to-day. A system which worked well 80 years ago is just as much suited for the entirely different conditions of to-day as a rail-
way engine of 80 years ago would be for the railway conditions to-day. There is one further fact to be considered, and that is the recent emergence of America as a lender in the international market and the great reform of her banking system which culminated in the Federal Reserve Act of 1913. These are results which we submit make it very urgent that an inquiry, a non-party inquiry, a nonpolitical inquiry, should be held for the purpose of reviewing the Bank Charter and ascertaining what modifications and changes might with advantage be adopted in order to make it more adaptable to present conditions. It is not for me at the moment to submit suggestions as to what changes in the functions and policy of the Bank are desirable. All we are asking at the moment is that such an inquiry should be held.
The importance of central banks being in close touch with each other, as was recommended by the Genoa Conference, cannot be exaggerated. I believe something of the sort is being carried on privately at the present time. We see mysterious paragraphs in the newspapers about meetings of the heads of the Federal Reserve Board and the Bank of England, the German Banks and, sometimes, the heads of the French National Bank, but we do not know what goes on. I believe a great deal of co-operation is going on, but it is not being carried out in accordance with the recommendations of the Genoa Conference. However able these men may be, however disinterested they may be, they cannot always be possessed of sufficient knowledge to enable them to come to the best conclusion. I do not say a word against the Directors of the Bank of England. They are very estimable gentlemen. Their duties are, I believe, not very onerous. They meet, I believe, for luncheon once a week and decide whether the Bank Rate should be raised or lowered or should remain at the existing level. But they are not men who can be said to be in close touch with the needs of the industry of the country. With one thing that the Financial Secretary said, I do most heartily agree, and that is this. I have no desire at all to see a central bank under political interference. I think it should be a public corporation, composed of the very best men, representatives of finance and industry, and that the Board of Trade should be represented as well as the great
co-operative movement and labour. If we had a body so constituted, it would command universal public confidence and support. I need not have said that because our Amendment is limited to the inquiry, and those are matters which would have to be considered by the Commission or Committee which might be appointed to conduct such an inquiry.
I now come to the other part of our Amendment which says that the resolutions of the Genoa Conference ought to have been implemented before a step was taken for amalgamating the note issue. Every one of the resolutions of the Genoa Conference was carried unanimously I believe. That Conference met at a time when chaos reigned in Europe. Budget deficits and currencies which were worthless were, I was going to say, the order of the day; rather were they the disorder of the day. A good deal has been done on the lines of the recommendations of the Genoa Conference. Countries on the Continent have to a very great extent put their financial houses in order. Budgets are now being balanced; currencies are stabilised, and all the countries, with the exception of France, have returned to one or other of the gold standards. The Genoa Conference, in one of its resolutions, stated that if currencies were stabilised on a gold basis, and if the full gold standard system were universally adopted and if gold coins and bullion were held as cover, then there would be a general scramble for gold, and the result would be the appreciation of the value of gold and a general fall of prices, with disastrous industrial results. Therefore, in order to avoid that danger, the Genoa Conference made a number of recommendations. Perhaps the most important of them was international cooperation in the use of gold. The second was the regulation of its distribution; and the third, very important, the regulation of its value so as to maintain a stable price level.
I have said that most of the countries of Europe have returned to the gold standard since the Genoa Conference. Fifteen of them have done so. But they have not all returned to the same form of the gold standard. I hope the House will excuse me if I explain in a very few words the three different forms of the gold standard which are in operation to-
day. I cannot for the moment call to mind any country where the full gold standard is in operation. Perhaps the United States is the exception. The full gold standard, of course, means a gold coinage and the convertibility of paper money into gold coins. Then we have the bullion system, which is the system under which the Bank of England is operating to-day. There is no gold coinage, but the bank buys bullion and sells bars, and that modification of the full gold standard was introduced in order to economise the use of gold and to increase the gold reserve so as to serve a larger volume of currency. Then there is the gold exchange system, which is now more generally in use on the Continent of Europe than any of the other forms. This system further economises the use of gold by substituting liquid resources. These liquid resources are held to maintain a parity in the currency and exchange.
It might appear that there are very many great advantages in the gold exchange system over either of the two others. It lessens the amount of sterilised gold and it saves the expense of bullion movements. It tends to lessen fluctuations in the value of gold and dislocation of prices. The old idea of a huge gold cover never had any more substantial foundation than convention or superstition. Countries are working quite safely on the gold exchange plan, and they are following out the recommendations of the Genoa Conference to adopt means for the economising of gold. I have here a further statement made by Mr. Leaf which bears both upon the amount of amalgamation issue and upon this gold exchange plan. It is a very interesting and very important statement. Mr. Leaf said:
It can hardly be long before some fresh arrangement is made by which the sole power of note issue will be given back to the Bank of England. The whole system of currency regulation will then have to be re-opened. The choice will be between a return to the strictly limited and mechanical system of the Bank Act Charter, with largely extended powers of fiduciary issue …, or some sort of arrangement as that which in one form or another exists in most foreign countries—an arrangement under which the Central Bank is allowed to issue a certain proportion of currency against the discount of approved commercial paper and/or Government securities, in place of the deposit of actual gold which our present system demands. This
plan has the great advantage of elasticity. It is in fact the means adopted by the United States in the reform of their issue system just before the War.
The withdrawal of gold coins has altered the convention in regard to the value of gold. No huge gold hoarding for the purpose of covering paper issues is any longer necessary. The only real use of the gold reserve now is to meet the needs of foreign exchange. This need should be reduced to a minimum by adopting one other of the recommendations of the Genoa Conference, namely, that certain selected central banks should act as the custodians of the gold holding of all the central banks. As a matter of fact I was reading recently an article written by a very eminent American economist—an article written on behalf of one of the American national banks. The point of the article was to rebut the charge that America is hoarding gold for her own purposes. The point was that she was holding it, or at any rate a large proportion of it, on behalf of creditors among the other central banks.
I want to consider this Bill in relation to these projects. I have already said that our Amendment does not disapprove of amalgamation, provided that these preliminary and essential conditions have first been carried out. It may be mentioned, in the course of the Debate, that I was responsible, when I was in office for a short time, for the appointment of a Committee to consider this question of Note amalgamation. It is quite true that I did appoint such a Committee, but I was not committed to the acceptance of any recommendations which such a Committee might make. As a matter of fact that Committee, when it did report, devoted 16 pages to dealing with other matters, and something less than half a page to dealing with the matter which had been remitted to it. The central point that we have to bear in mind in the consideration of this Bill is the matter of elasticity. The Chancellor of the Exchequer referred to this subject in one sentence only in his Budget speech. He said that this Bill when it appeared, would provide for greater elasticity in the matter of the Note issue. From that some of us hoped that when the Bill did make its appearance it would be much more elastic than it now happens to be.
5.0 p.m.
Our objection to the fixing of the fiduciary limit of £260,000,000 is one that is
snared by bankers, financiers and traders. I want to be quite uncontroversial. Not in the least do I wish to be offensive. But I may perhaps be allowed to say that the Government have had a particularly bad financial press for this Measure. I have not seen in the comments that a single financial writer has given whole-hearted support to this Bill. Most writers have been very severely critical. There is common agreement upon this—that currency should be sufficient to meet legitimate demand. It should be sufficient to prevent both inflation and deflation. I believe the Prime Minister on one occasion said he was neither an inflationist nor a deflationist; he was a non-flationist. That is exactly what we ought to strive for—neither deflation nor inflation. The expansion of currency or credit, ought not to precede but ought to accompany the legitimate expansion of trade. How far does the Bill give that elasticity? I have taken the trouble to work it out, from the figures of the bank return of last Friday, and this is the result at which I have arrived:—Bank notes £180,000,000; currency, £294,442,000, making a total of £474,442,000. The banknote security against this is £56,200,000; gold holding, £160,326,000. Therefore already the fiduciary issue, last Friday was £258,000,000. The issue not covered by gold allowed by this Bill is thus only £2,000,000 more than the present figure. At present there is no seasonal call for any increase in currency but last Christmas the figure rose as high as £263,000,000. The Treasury limit this year is over 2264,000,000, and last year it fluctuated between £243.7 millions and £264.7 millions.
It will be seen from these figures that, if the fiduciary limit laid down by the Bill is sufficient for the present, it certainly is not sufficient to meet a legitimate expansion of trade, or any exceptional but perfectly legitimate call for an increase in currency notes. The hon. Gentleman referred to the Irish Free State. When they get their new currency note issue into operation there will be a release of the currency notes which are in use there at the present time; but I was surprised to hear him put the figure as high as £6,000,000. I have never before seen it put higher than £5,000,000. The Bill provides that this maximum of £260,000,000 may be reduced or increased
by consultation between the Bank of England and the Treasury, but the initiative is to come from the Bank of England. There is a most important point to which the hon. Gentleman did not call attention—that if, after consultation between the Bank of England and the Treasury, permission is given to increase the fiduciary issue for not more than six months, any increase allowed must be in the form of bank notes covered by gold. That may create a very difficult position. The gold position is very strong at present. I believe it has never been so strong in the history of the bank; but, if the need should arise to increase currency, and the gold position requires to be strengthened, then there would be an increased scramble for gold and a heavy increase in the bank rate, and that would defeat the very purpose for which the increased currency was required. The result would be further depression in trade.
It seems to me that this provision is intended to deal only with temporary emergencies, and is not to be permanent. Under the Bank Charter Act, the Bank of England may, with the permission of the Chancellor of the Exchequer, increase the note issue, but the Chancellor of the Exchequer has to go to Parliament to get an indemnity and it seems to me this proposal leaves things very much as they are under the Bank Charter, except slightly modifying the procedure and getting rid of the necessity of going to Parliament for an indemnity. This part of the Bill will make the currency static within very rigid and narrow limits. It may be said that it provides for an increase for six months, and that that increase may be permitted for two years, and then, if circumstances demand it, Parliament may be asked to continue it. But that is not a satisfactory way of dealing with it at all. Once, however, you have fixed these things down by law it is very difficult to alter them, and there should, therefore, be given to the controlling authority—the central bank—very large powers to meet a demand for an increase of currency within wide but, of course, quite reasonable limits. Otherwise, what we are doing by this Bill is to make currency not the servant but the master of trade and industry.
Therefore, when we get to Committee we shall ask that Clause 8 should be remodelled, and that it should be made clear that greater powers of elasticity should be given to the central bank. If I may be allowed to say so, there is another very important criticism to be brought against this rigid limitation. It seems to be based on the idea that there is never going to be an improvement in trade. We have at the present time 1,000,000 unemployed. Supposing trade did improve and absorbed half of these men. The increase in the demand for currency which would follow would require, as far as I can calculate it, an expansion of currency of at least £10,000,000. But surely we are looking for something more than the absorption of half a million men. We are looking not merely for an increase in employment. There is also the question of increase in population, and these may lead to very great expansion and to a great increase in the purchasing power of the wage-earning classes. If this fiduciary issue be fixed at this rigid figure, it makes no provision whatever for an increase of wages and a corresponding increase in the consuming power of the great mass of the people.
This question of note currency is mainly of importance to the wage-earning classes. They only use currency notes. Every Member of this House pays by far the greater part of his expenditure not in paper notes, but in cheques. Therefore, from the personal point of view, the limitation of currency is less serious to those who have bank accounts and cheque books than to those whose means of purchase are confined solely to currency notes. These are the two points in our Amendment. They are, first, I will not say the reform of, but an inquiry into the Bank Charter, and the powers and constitution of the Bank of England; and, secondly, this question of gold and the influence of gold hoarding upon currency and upon credit. I have submitted these observations, as I say, in no dogmatic spirit. In such a difficult question as this, the wisest are as learners. In this spirit I submit this Amendment to the fair and impartial consideration of the House of Commons.

Sir HILTON YOUNG: There are at least two, if not more observations, made by the right hon. Gentleman who has
just sat down, in which he will carry with him the whole House. The first was his tribute to the services rendered to the nation and, indeed, to the whole of Europe, by the present Governor of the Bank of England, who has so brilliantly—if I may say so without assumption—discharged those functions which were laid upon our financial leader in such matters by the Conference of Genoa. The second observation in which the right hon. Gentleman will carry the House with him was his aspiration that this question might be raised above party politics. We have only had to listen to the Debate so far—to the clear exposition and historical illumination which has been given to the subject in the able speech of the Financial Secretary to the Treasury and the interesting speech of the right hon. Gentleman the Member for Colne Valley (Mr. Snowden)—to realise, in spite of the lucidity with which it has been treated, that this is an extraordinarily complex question, and that we are likely to get little help by turning on to it the merely wrathful forces of party controversy.
As I followed the right hon. Gentleman's arguments in favour of his Amendment, I found some difficulty in persuading myself that he had made a good case for the Amendment. If I may take his arguments in the reverse order to that in which they were developed, would say, first, that we are all eager to find out in what respects the Resolutions passed at Genoa have not been carried out by this country. I do not think I heard anything which went to show that they had not been carried out. Genoa was in favour of the co-operation of the central banks. It has been the brilliant work of the present Governor of the Bank of England, to which the right hon. Gentleman himself paid tribute, to have advanced that co-operation as fast as it could be advanced. Genoa was in favour of a return to the gold standard. We have returned to the gold standard—not entirely with the approbation of the hon. Gentlemen opposite. Genoa was in favour of the economisation of gold. As the right hon. Gentleman has so clearly pointed out, gold is economised by the use of the exchange standard, and that is the standard which we have adopted. If I found one point in which the right hon. Gentleman seemed to think we had fallen short of the
standards of Genoa, it was, what I understood to be his contention, that it was unnecessary at the present time and in the present stage of civilisation, to keep such large gold supplies as we keep for the purposes of internal security as apart from the purposes of international payment.
On this point, I find myself at variance with the right hon. Gentleman. I cannot think that it would yet be safe for us to rely on any other support for our paper currency than an adequate reserve of gold for the purpose of dealing with crises in the matter of internal confidence. After all, and in the last resort, it is to gold that people turn in moments of danger and anxiety. We know so well that that was so at the beginning of the great War. When the minds of men are disturbed, they are content with no other form of property as a store of values than hard red gold. The second branch of the right hon. Gentleman's argument was in favour of inquiry before proceeding with this Measure. With this argument I find myself in a large measure of sympathy, but not, if I may say so, as a preliminary to proceeding with this Measure. I cannot see why this Measure should wait for an inquiry. The things on which we require inquiry have nothing to do with this Measure.
The truth is that this Measure is smaller in importance than is sometimes supposed. Our paper currency is in this country of comparatively small importance, in comparison, that is, with Continental countries which use only paper currency for payments. Our paper currency is used for rather less than 1 per cent. of the total payments made in this country; the rest is made by cheques, or bankers' money. It is sometimes argued that the whole structure of credit is built upon a sufficiency of paper currency. Many will agree that that is an illusion. It is the supply of credit that determines the supply of paper currency, and not the other way about. The supply of credit depends in this country, not upon the supply of paper notes, but upon the engine which controls bankers' money. That is the Bank Rate, and the Bank's open market policy.
We are discussing to-day a consequential step only upon the return to gold. It is a necessary measure, as all
know who have interested themselves in the subject, for any sound system of currency which involves a paper circulation. You must have a fixed ratio between the paper circulation and the gold reserves. Two things are needed for a sound system. First, the paper currency must be convertible at some fixed ratio into metallic gold. Secondly, there must be a fixed relation between the gold reserves and the supply of paper currency; fixed, that is, by some law or rule that is observed. In the erection of our modern currency standard, we have taken the first step of fixing the ratio of paper currency to gold, but we have not yet taken, in any scientific or sound form, the second step of fixing the relation between our total paper circulation and our gold reserve. All that we have had is a Treasury Minute saying that the actual maximum of the preceding year shall be the legal maximum in the following year. That was not enough. It was a bad example to the world to have no more binding rule connecting our reserves and our paper currency than that.
This Bill takes the second necessary step and gives us a currency system of which we need not be ashamed in the eyes of the world. It is very important that we should have one, because we have to remember that owing to our position, we have to stand in the position of the schoolmaster, as regards currency systems, before the world. If we are to be the world's schoolmaster and indoctrinate sound currency principles, we must have sound currency principles ourselves. We should not hesitate to make our existing system as sound as it can be, and then perhaps leave for subsequent discussion the question whether some other system might not be better. We have built the house up to the roof, and we ought not to stop putting on the last tile while we discuss whether or not we ought to build some other sort of house.
The right hon. Gentleman raised three separate topics. At the back of his mind, or rather at the back of the bench on which he sits, there is agitated the question as to whether or not we ought to have returned to the gold standard when we did, and whether we ought not to have some other standard. I agree with
him that I should like to see a general inquiry into that problem on the widest basis, availing itself of every possible means of knowledge and information, because I believe it will serve that high end, to which he has referred, of removing this topic from party politics. I do not myself feel any doubt about the result of the inquiry, but that is a different matter. I think I can understand the reluctance on the part of the Government to allow an inquiry into that matter, a reluctance which is no doubt due to disinclination to suggest any doubt at all in the mind of the world at large whether we are going to retain gold as our standard of currency. I think, even so, there are greater advantages to be gained by a free and enlarged inquiry into that topic, which will set this matter at rest.
The other topic which the right hon. Gentleman raises is one which I think lies nearer to his heart and which he argued with more direct approval. That is an inquiry into the constitution of the Bank of England. I doubt whether an inquiry of the sort would lead to any useful results. We are blessed at present with an institution which, although it may be theoretically hard to defend, is practically unsurpassed. Like so many other institutions in this country, it is an illustration of the practical genius of this people, which gives us exactly the institution which we want. There are very few attractions in the institution which the right hon. Gentleman sketched, an institution in which the governing body was composed of representatives of conflicting interests. That is not the way in which to arrive at wise decisions in such an important matter as the supply of credit.
The right body to give the right decision is a body which is in an arbitral position above interest. I know hon. Members opposite will not be inclined to admit the proposition that the Bank of England is a body whose governing body is above interest. Nevertheless, I think, taking this bad world for what it is and men for what they are, you have there a body which is ideally situate to be impartial in decisions about the credit supply of the country. They know, because they are the people who hold all the threads of industry and financial interest that are drawn together in a
single knot in the City of London. Their very interests put them in an impartial place as between those who supply credit and those who use it. Those are the two qualifications that you most need.
This Bill, as the Financial Secretary justly said, fulfils the purpose of bringing under a single control the two forms of authority which have to be exercised in this matter—authority for the supply of credit and authority for the supply of currency. It is thoroughly unsatisfactory to have two branches of what is really one business carried out by two bodies, the Treasury and the Bank of England.
No occasion of this sort ought to be allowed to pass by one who has experience of countries in which there has been acute inflation without emphasising that almost the highest of all points of statecraft in relation to the organisation of the supply of currency and credit is to take every conceivable measure to fortify the machine of currency and credit against any influence on the part of the State in the direction of inflation. Again and again we have seen the disastrous consequences which were experienced by many nations in Europe after the War in consequence of that fatal lesson, which they had learned during the War, how to make money by the printing press for the temporary purposes of government. It is sometimes thought, and in particular by hon. Members opposite, that that inflation tax is a tax which particularly works harm only to the middle classes, to those who have accumulated capital. But those who have been in close contact with the effects of inflation upon great industrial communities know only too well that the most disastrous of all consequences that it had upon any area of the social structure was the ruin and misery which it brought to the wage-earner, through the paralysis of industry, prolonged unemployment, and strikes, leading to the worst of all forms of disaster, civil strife, and the break up of the old social order. This was the result of the evaporation of working capital and the mad, circular race in which wages and cost of living chased each other round and round. Those are the worst of all evils which the community can suffer, and the best protections against them are, first, a sound gold standard, and, secondly, an impartial authority to control the supply of
credit, as strongly fortified, in some institution like the Bank of England, from any form of political pressure as it can possibly be.
The right hon. Gentleman's third topic was that of elasticity, and that is a matter on which the House, I am sure, would be inclined to follow him in a most anxious and careful scrutiny of this Measure. The gold standard and the constitution of the Bank of England have not to be decided on this occasion, but this matter of a standard which will give us adequate elasticity has to be decided here and now, and it is, therefore, a matter on which we are bound to ask for the most full explanation. The right hon. Gentleman has advanced with great force, and expressed with great clearness those doubts and apprehensions which have been expressed in some quarters as to the provisions of this Bill, whether or not the elasticity which it provides for our industrial and mercantile system is sufficient. I imagine that the orthodox answer to the right hon. Gentleman is that a measure of elasticity will be sufficiently provided by the normal working of the exchange standard and the attraction of gold to our shores when there is an expansion of trade here. In pre-War days that mechanism was no doubt adequate to provide us with the elasticity which we required, but there may well be some doubt, about the present time. We must remember that in pre-War days we had a very much more powerful position as regards the rest of the world than we have now. We were then a much bigger creditor and could much more easily turn exchanges in our favour and call gold here when we wanted it. It may well be that a greater measure of immediate elasticity may be required now to meet our somewhat enfeebled position in that respect.
There are those who have argued very strongly in favour of the system, which is now commonly adopted on the Continent, of the percentage basis for the note issue, instead of the fixed fiduciary issue. No doubt this would provide a more elastic system. I do not think that there would be any great shock throughout the commercial and financial community if such a system were adopted in this country. But our strong traditional adherence to what has been found effective in the past has, no doubt, had some
influence in prevailing upon the authorities to prefer a system of fixed fiduciary issue. There is the provision in the Bill, to which the right hon. Gentleman referred, which would no doubt be adequate, and more than adequate, to make the fixed fiduciary basis provide sufficient elasticity for all our purposes, if it were used in an effective way. This raises a question which it is our business to ask on the present occasion. With what intention is there introduced into the Bill this provision under which, on the application of the Bank of England, the Treasury may permit an expansion of the note issue? Is it simply to provide for great crises, such as those under which the Bank Charter Act was suspended? If it is, it will be of no use at all for the purpose of furnishing elasticity for seasonal movements. Is it, on the other hand, introduced for the purpose of providing for seasonal expansions? If it is, there are some of its provisions which seem to be cumbrous and which might be rendered more convenient.
That may be a matter for revision in Committee, but I am confident that it will give the greatest possible reassurance to those who have some doubt whether this Bill really provides for sufficient elasticity, if it is explained to us that this provision is introduced for the purpose, not only of letting the stitches out in grave crises, but of actually allowing for seasonal expansions, which are necessary in order to finance fluctuations in the trade of the country. If this provision is meant for normal use, I think the Bill will meet with little effective criticism. It makes the provision necessary in order to complete the structure of the gold standard, and with the single reservation that the provisions relating to elasticity are made for use and not only for show, the Bill leaves not much to be desired.

Mr. STRAUSS: I shall be expressing the feelings of the House when I say that we welcome the right hon. Gentleman back again. He always speaks with authority on these matters, and I trust that he will excuse me if I do not follow him on the lines which he adopted. The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) always speaks with profound conviction, but I am sorry that I cannot agree with him.
I do not wish to offer any opinion with regard to an inquiry. I am not a banker, and I do not pretend to know anything about the mysteries of banking, but I should like to ask him in what country there is a better banking system than the system in this country. This Bill contains very technical matters which at first sight make one think that it is a Measure simply concerned with banking, but a Measure that deals with the proper regulation of the currency of this country affects the traders of this country more than any other section of the community, and it is as a trader, and not as a banker, that I wish to make a few observations. There is some confusion in the minds of people as to what is the proper function of money, especially of gold. In considering this Bill, we must not lose sight of the fact that money is simply an instrument for the purpose of exchange. Therefore, what we as traders, who are occupied with international trade, desire above everything is a stable currency, a stable measure of exchange. Gold is the only commodity that does not fluctuate very much.
I have heard people remark that our return to the gold standard was the cause of all the dislocation in trade. We cannot close our eyes to the fact that, when we adopted it again, a great deal of suffering and unemployment was caused. The criticism which I would offer is that we were rather in a hurry in returning to the gold standard. It was not a case of an old man in a hurry, but of a young man in a hurry, and I think that, if it had been done more gradually, and not so suddenly, we should not have had the unemployment that we have experienced. I fully agree with the right hon. Member for Colne Valley that the Resolutions passed at Genoa are most excellent, but I think that it will take some time, probably some years, before they materialise. I only trust that, in the meantime, every finance Minister in the world will study them, and take them to heart. I have the greatest admiration for a clever politician, but the last thing I desire to see in this country is the ordinary working of our financial arrangements, upon which trade and industry depend, made the subject of political controversy. I am old-fashioned enough to think—and I feel that I am not far wrong—that the more we keep finance, trade and industry outside the arena of party politics, the better
it is for all of us. I should like to give an object lesson of what I mean. At the present time, a great controversy is raging in the United States with regard to the Federal Reserve system. We all know that the United States has more gold than any other country in the world, but you can borrow money at a lower rate of interest in London than in New York. That speaks volumes for our banking system. I am told that the reason money is scarce in the United States is that a great boom is being engineered in that country for political purposes, in order favourably to influence the electorate in the forthcoming Presidential election. The introduction of political considerations into finance has a most corrupting influence, and I am glad to think that we in this country are free from such things.
When this Bill reaches the Statute Book, I am glad to say that it will be impossible for those gentlemen in power in the Treasury to increase the volume or the quantity of oar currency at wilt by means of the printing press. Nothing is more disastrous for a commercial country than to create an artificial prosperity, an artificial wealth by means of inflation. We have had some very bitter experience of inflation, but, I am glad to think, not so bitter and far-reaching as in some other European countries. I believe that when this Bill reaches the Statute Book, it will act as a rampart against an attack of inflated currency. We never know who the next Chancellor of the Exchequer may be. We may have a Chancellor the prototype of the hon. and gallant Baronet the Member for Bournemouth (Sir H. Croft). or the prototype of the right hon. Gentleman the Member for Shettleston (Mr. Wheatley), but whoever the future Chancellor may be, we want to make it as difficult as possible for him to meet his financial difficulties by means of inflation.

Mr. E. C. GRENFELL: I have been in doubt as to whether I should intervene in this Debate at all, because, presumably, if the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) has this inquiry, I shall be under trial, as well as other people. At the same time, if this Bill goes through. I shall certainly be under trial in another place for surrendering profits of the
stockholders to the Government. At first, I was inclined to think that this Bill would meet with little interest in the country, because it seems to be merely the consequential result of the return to gold in 1925. To the man-in-the-street, the only difference would appear to be that the, piece of paper which he is lucky enough to have, will be a Bank of England bit of paper, instead of what was called a "Bradbury" or a Treasury note. He will see no difference, except that, I can assure the House, the signature on the Bank of England note will be much more legible than that of the high official ruling over the Treasury. It is very important that everyone should have a much greater interest in these currency matters than that. We must remember that when first the Bolsheviks came into control in Russia, they saw the value of depreciating and destroying all faith in currency, and they spared no pains to do so. They felt sure that, in order to produce anarchy, the destruction of all faith in currency would be more helpful than anything else. After the way in which this Amendment was introduced, no one must imagine that I am going to introduce a political question into this matter, but it was well understood in the world that this was one of the objects of the Bolshevist propaganda at the time.

Mr. HARDIE: What about the German mark?

Mr. GRENFELL: That followed, and was extraordinarily successful. It very nearly produced a revolution, which might have done the same amount of harm as was done to the Russians. I think we must all agree that to-day and in Committee this matter ought to be left free from all political partisanship. What is the history of this inquiry into the Bank of England and into the 1844 Act? It is not a new thing at all. There was a discussion on this question in 1866; there have been discussions ever since when anything has appeared to go wrong. If we look back to what happened in the last few years, we see that the first committee, the Cunliffe Committee as it was called, was appointed at a time when we had not emerged from out active War troubles early in 1918. That committee consisted mainly of bankers and of people closely connected with the banking business, and yet they were able to
present an almost unanimous report. They had been asked to look into the 1844 Act and the constitution and the functions of the Bank of England. The first speaker to-day remarked that it was difficult to get experts to be unanimous, but this Committee of Bankers was unanimous. I must take up the time of the House for a moment by making a quotation from the interim report of that committee, because it has a bearing on tins issue, and a few sentences in it fully explain the situation with which we are dealing to-day:
The pre-War gold reserves were about £38,500,000 in the Bank of England and an amount estimated at £123,000,000 in the hanks and in the pockets of the people. If the actual circulation of gold coin ceases and the whole of the gold is concentrated in the central institution some economy is permissible in view of its increased mobility. On the other hand, the aggregate amount of currency required will undoubtedly be larger. We accordingly recommend that the amount to be aimed at in the first instance as the normal minimum amount of the central gold reserve should be £150,000,000 and that until this amount has been reached and maintained concurrently with a satisfactory foreign exchange position for a period of at least a year, the policy of reducing the uncovered note issue as and when opportunity offers should be consistently followed. In view of the economic conditions which are likely to follow the restoration of peace it will be necessary to apply this policy with extreme caution and without undue rigidity. When the exchanges are working normally on t he basis of a minimum reserve of £150,000,000, the position should again he reviewed in the light of the dimensions of the fiduciary issue as it then exists.
That is from the interim report published at the end of 1918. It indicates the foresight of those bankers. In the light of the situation which arose after the War, hardly any words of that report need be altered. It was acted on by a Treasury Minute which recommended the reduction of the note issue "with extreme caution and without undue rigidity." After that, as we know, the Genoa Conference met, and the late Chancellor of the Exchequer appointed another committee, not a committee of bankers, as in the previous case, but a committee consisting of one ex-Treasury official, Lord Bradbury, one foreign merchant banker, the permanent head of the Treasury, Sir Otto Niemeyer, and the Cambridge Professor of Political Economy. That was a totally different sort of committee from that which was
appointed in 1918. It took evidence from all the most prominent institutions which wished to come before it, and from some of those who to-day are our critics. They examined the Governor of the Bank of England, Mr. McKenna, Sir Robert Horne, Mr. Keynes and representatives of the clearing banks, the Association of Chambers of Commerce and the Federation of British Industries. The terms of reference of that committee were similar to those of the committee appointed in 1918, and in the end their recommendation was:
We anticipate that if the free gold market is restored at the end of 1925 the experience necessary to enable the amount of the fiduciary issue to be definitely fixed will have been obtained by the end of 1927. The transfer of the issue could then take place early in 1928. But it may well be possible to accelerate those dates in the light of experience.
Both those committees seemed to have laid down rules for a time-table to which we are working very closely. In each case it was recommended that gold should be centralised in the Bank of England, that there should be no alteration in the issue or form of issue of the accounts of the Bank of England, and, though they were asked to make recommendations as regards the Bank of England, they have made none, except that it should continue as it has been. I am by no means maintaining that the management of the Bank of England has been or is entirely perfect. Both these committees have recommended that we should take the course which the Bank of England is now taking, and if any discussion is to take place and any committee is to be appointed, I think it should take its time and do its work leisurely, and that this Bill should not be held up for such an inquiry. Two committees not composed of the same type of men have reported unanimously, and I believe that such an inquiry as may be suggested now would also be able to report in the same sense. There is no reason for hanging up this Bill on that account.
I was struck by the manner in which the right hon. Gentleman the Member for Colne Valley introduced this Amendment. If the other eminent Members associated with that Amendment take the same line, I think some working arrangement will be possible which will enable this Bill to be passed without Amend-
meat. It would be a great pity if a subject of such complexity were to be bandied about and written about in the Press in a manner calculated to bring odium on the bankers, or whoever may be resronsible for this Measure. As the amendment makes a distinct attack on the lack of action taken on the Genoa Conference and the Genoa resolutions, I would like to point out that no conference since the War that I have heard of, and no international meeting to make a treaty, has had such a successful result as was attained at Genoa. Hardly any resolutions were passed at Genoa which have not been acted upon in whole or in part. In the majority of cases we find that the unanimous report of Genoa has been followed by unanimous action in Europe generally, which is an achievement of which the people who drew up that report may be justly proud. The right hon. Member for Colne Valley raises the point that a Convention should have been called by the Bank of England. If such a Convention had been called and had come to a unanimous resolution, it would have been all to the good, but I think anyone who is conversant with what has gone on in the past six years would also be aware that there have been so many dissensions among the different countries before they got on their financial feet, and afterwards, that it was believed no good result would come from calling a meeting. If there was the possibility of a further quarrel arising, I think the powers that be, whether the Bank of England or someone else, were wise in avoiding a meeting which could have no good result.
There is one other question which has been the subject of criticism regarding the Genoa resolution and that is with regard to the fixing of prices. That is a very difficult thing to do. I doubt whether there is any agreement between the principal countries or the principal banks on that question. It is a dangerous thing to tackle unless you are perfectly sure of having absolute agreement all round. I welcome the way in which this Amendment has been moved, and I hope it will not be pressed, but in view of the good feeling likely to be engendered by the speech of the Mover of the Amendment and if the Bill is passed without criticism,, I should he ready to meet any inquiry.

Mr. PETHICK-LAWRENCE: I rise to support the Amendment and to oppose the Bill. In common with the hon. Member for the City of London (Mr. E. C. Grenfell), and in common, I think, with all those who have hitherto taken part in this Debate, I realise the very great importance of this question, and I hope that what he has said is true, and that this is not to be regarded as a party difference of opinion. I hope the Government will recognise that by taking off the Whips and allowing Members to vote freely. Of course, as a back bencher, I am not in a position to pledge the Whips on this side of the House, but if the Government were prepared to take off their Whips I have no doubt that our party would follow suit, so leaving the question to the free judgment of Members in all parts of the House.
6.0 p.m.
This Bill has been represented by its promoters as a forward move in accordance with the declared policy of this country. In my judgment, on the contrary, it is a backward and a disastrous move. I consider it is a return to out-of-date conditions, and at variance with the best international views on currency. The consequences are so momentous that they may outweigh altogether any possible relief which may come to industry from the Chancellor of the Exchequer's rating scheme, assuming that that scheme has the merits which he alleges it has. I believe that this Bill jeopardises the recovery of trade and the ending of that terrible problem of unemployment which hon. Members in all parts of the House unite in deploring. If my diagnosis be correct, I submit that this Bill ought to meet with implacable hostility not merely from right hon. Gentleman on the Front Opposition Bench and my hon. Friends behind me but from all industrialists in every part of this House.
I am aware that those of us who take an active part in opposition to this Bill are likely to be called currency faddists and charged with being heterodox in matters of finance. I remember the Chancellor of the Exchequer, when I called attention to a statement by a member of his own Commission—perhaps the most eminent statistician in this country, I allude to Sir Josiah Stamp—the right hon. Gentleman made the remark that this eminent statistician had con-
tracted currency fever. No doubt the Chancellor of the Exchequer had he been present would have tried to laugh our opposition out of court by some equally picturesque if inapt metaphor applied to our views. In common with my right hon. Friend who moved this Amendment, I say that we have a complete answer to that charge and we take our stand upon the Conference at Genoa. The hon. Member for the City of London referred to the Cunliffe Committee, but, of course, the point is that subsequent to the Can-life Committee we have had the Resolutions passed at Genoa which very much modified the decisions of the Cunliffe Committee. At Genoa we had not merely the currency experts of this country but we also had the best financial advisers of all the countries in Europe, and their decisions are perhaps the most important that have ever been arrived at by any financial body of opinion in the world. It is quite possible that the Chancellor of the Exchequer might deride the findings of the International Conference at Genoa, but I am sure the Minister for War cannot deride those decisions because not merely was he the British representative at that Conference, but he was the Chairman of the Finance Commission, and, to a large extent, the resolutions at Genoa are actually his resolutions. The line which the Secretary of State for War will very likely take is that the decisions at Genoa have actually been carried out. Assuming that is his case let us examine what those decisions were. One decision was that there ought to be a conference of central banks, but the resolution which was passed said more than that because it stated that this conference of central banks ought to draw up a convention and one of the salient proposals of that convention are contained in Resolution 9 which at its conclusion uses these significant words:
The Convention should embody some means of economising the use of gold by maintaining reserves in the form of foreign balances such, for example, as the gold exchange standard or an international clearing system.
When the right hon. Gentleman the Member for Norwich (Sir H. Young) says that the resolutions of the Conference at Genoa have been carried out or most of them, I wish to point out that this most
significant proposal at Genoa that the central banks should summon this conference and that it should carry out this most important provision has not been implemented at all. Further, so far as I am aware the Bank of England even apart from this Conference has not carried out the proposal referred to in the extract which I have read from the resolution. If they have carried it out they have not mentioned it and it can only have been done without anyone knowing anything about it. If they have carried it out that will be something to their credit. Instead of carrying out these Genoa proposals, the Government in this Bill are reverting to a policy envisaged before Genoa and they are doing this without taking into account any of the events of the last seven years which have been rich in object lessons which should have taught us to modify the course of action which we should take.
I come now to this particular Bill which proposes to fix the fiduciary note issue at £260,000,000. This covers our immediate requirements but it provides no slack and the whole basis of our criticism is the necessity of providing adequate slack for dealing with a revival of trade and industry and a reduction of unemployment. No matter how much industry may expand, no matter how many additional workers become employed; no matter what increases of wages or increase of purchasing power takes place, when all these things come into operation the cash of this country necessary to meet them cannot be increased in any natural way. I will come presently to the more or less unnatural ways by which cash can be increased, but before I come to that part of the subject, let us see what this failure to provide the means by which the cash can reasonably be increased involves. It means the encasement of the life of a nation in a strait jacket.
Let me put it in another way. A little while before the War it was the fashion for the women of Western civilisation to encase themselves so tightly in steel or whalebone that the natural expansion of their lungs was rendered difficult. Since that period, the effect of sport and the inculcation of sound medical ideas has ended that practice. Now the Government have decided by this Bill to revert
to tight lacing in the matter of money, and just when the lungs of industry are seeking to expand, we shall find them constricted by the limits which the Government are going to put on. In spite of the fact that more men will be employed and more cash will be required for wages, and in spite of the fact that the number of transactions multiply, the additional cash will not be available under this Bill.
It will no doubt be said that there are means by which this cash can expand. I propose to consider those means. It will be said, in the first place, that the amount of available cash can be made to expand by getting more gold. What are the conditions for getting more gold? The Bank of England will have to attract it, and how can that be done? The Bank of England can only attract gold by raising the bank rate and contracting credit, and by taking steps to bring about such a fall in prices that it would pay a foreign country to send gold to this country instead of commodities. To use my metaphor again, that is like saying that the lady need not be aware of her own restraint if she be given a drug to compel her to take small breaths. The contraction of credit and the fall in prices are the two things which bring any revival of industry to a rapid close. If we are to have a real revival of trade and a real absorption of the unemployed, those reforms cannot be brought about in that way.
But it may be said that in addition to those methods the Bank of England will be able to avail itself of the plan proposed in Clause 8, which enables greater elasticity to take place. It is perfectly clear to me from the text of the Bill—and this is my answer to the right hon. Gentleman the Member for Norwich—that this provision is not to he applied in the case of a normal healthy development whenever there are signs of real expansion of trade, but that it is only intended as an emergency provision. The principles of that provision and the terms in which they are expressed are a purely temporary measure for six months at first, and then a further six months, but in no case can it exceed two years without a special Act of Parliament giving power for this to be done. In my view the past history of the Bank of England and the Treasury, act
-ing in conjunction, is not such as to justify us in thinking that they will adopt this necessary expansion until they have tried other methods of meeting the situation.
I have no intention of going into the question of the restoration of the gold standard. I realise that the gold standard was a right standard to adopt, and that the step taken in 1925 is an irrevocable step. I have always maintained that that step was taken at the wrong time and in the wrong way, just because the Bank of England and the Treasury, acting in conjunction, did not visualise to the extent that they should have done the amount of injury they were inflicting upon industry and employment. Anyone who has studied this matter must admit that, whatever may have been the total effect of returning to the gold standard in 1925, it did have a grave effect, as Sir Josiah Stamp pointed out, in hindering industry at that time. If the Bank of England and the Treasury had defended their action on the lines that they knew it was going to injure industry, but that the other consequences were more important, we should have had more confidence that they would be likely to use their powers under this Bill to a better advantage.
The line which the Chancellor of the Exchequer has always taken, I imagine on the authority of the Treasury, is that the return to the gold standard, and the deflation which that involved, had no serious effect upon industry at all, and that the two things were utterly unconnected. If that be the view of the Treasury, I have very grave fears that this so-called elastic Clause in the Bill, Clause 8, will not be used in the way that the right hon. Gentleman the Member for Norwich recommends, and I am rather sorry that the hon. Member for the City of London did not attempt, in part at any rate, to clear up this question when he spoke. It would have been of great interest if he could have told us that, as far as he was concerned at any rate, he understood Clause 8 to be, not a provision for a temporary emergency, but a provision which was intended to be used when industry showed legitimate signs of expansion.
In order to make it clear that I am not speaking merely for myself in this matter, I should like to read a very short
sentence from an important paper which deals with finance, namely, the "Statist." These words appear in an article on page 815 of the current issue:
It will be open to the Bank, of course, to apply to the Treasury for an extension of the fiduciary circulation"—
that is, when trade revives.
It stands to reason that the Bank will only avail itself of this recourse with the greatest diffidence, and only after having attempted by all available restrictive means to avoid this damaging admission of a weak position. Much harm would by then have been done. A normal expansion of currency would have been fought, to the inevitable detriment of our trade and industry.
That is our position. It seems to me to be perfectly clear, from the express words used in this Bill, that this elastic provision is not intended to meet the normal requirements of trade, and that the Bank will not so interpret it, but will take every other action to contract the currency, to restrict credit, and injure industry, and only in some extraordinary crisis will this provision be actually put into operation. In other words, to go back to my metaphor, only when the lady is in extremis will the doctor or the maid be called in to cut the lacing and set her temporarily free, to revert to her pernicious practice next day.
I come to another aspect of the question, and that is the danger of a foreign withdrawal of gold. We saw only a little while back the very grave effects of a French demand for gold from this country, and the way in which that French demand prejudiced the margin of the bankers' gold. I have seen statements—if they are wrong, no doubt I shall be corrected—that the balance in the Bank of England on which the French have a right to call at the present time probably exceeds the whole margin of free gold which will be provided if this Bill comes into effect. Therefore, the French Government—the French bankers—will have it in their power, not only to call up the whole of the free gold which is available, but a considerably larger sum than that. Suppose that they, or some other country which happened to have credit here, took that course, and chose to come upon the Bank of England for a considerable part of the sum to which they were entitled, saying, "We want to take our balance
in gold. It is no business of yours; it is our business; we have a right to claim gold if we want it, and we intend to take it." Is it not perfectly clear that, if this Bill be law then, that will seriously derange our credit, seriously jeopardise the amount of cash which is available, alter our price level, and bring grave trouble to this country?
I am quite aware that those who, like myself, are opposed to this Bill, will be charged with being inflationists. The hon. Member for Southwark North (Mr. Strauss) spoke about inflation, and seemed to suggest that anyone who disagreed with him on this Bill was an inflationist. Cannot we get away from the absurd idea that, if you are not at one extreme, you must. be at the other—that, if you are not for Oxford, you must be for Cambridge in the Boat Race, because in that case there are only those two crews; that, if everything is not black, it must be white? In this question of currency there is, surely, a sound course between these two extremes. I certainly am not an inflationist. I am entirely opposed to inflation, and I recognise the grave importance of putting such limits as to prevent inflation. That does not mean that I am a deflationist. I am equally against that. What I want is stability, and that seems to me to be the only sound thing. I want a yard measure which is a yard measure, and which remains of one length and does not vary. In just the same way I want a fixed unit of time, of weight, and of volume. If you do not have that, you are going to deal most unfairly and unjustly with respective interests in this country. Suppose that the yard measure were changed in length. Suppose that the yard measure were to shrink between the time when the shopkeeper bought his goods and the time when he sold them. Then, every time that the yard measure shrank, he would cheat his customers, and not only so, but the yard measure would gradually go down and down until it became ridiculous. On the other hand, if it were to increase, the shopkeeper would be put out of business because he would be utterly unable to meet the demand constantly to supply retail a larger measure of cloth than he had bought at a certain price from the wholesaler.
It is precisely the same in this matter of money. If you are going to have inflation, that means a continual rise in prices, and you get all sorts of difficulties, which hon. Members who support this Bill have rightly quoted; but, quite equally, if you are going to have deflation, if you are going to have prices tumbling, you are going to ruin industry and cause unemployment. The Promoters of this Bill—and this is the point—seem to think that, so long as you tie down your currency to gold, you are going to have neither inflation nor deflation. That is not my view, and I do not think it is the view that was taken at Genoa. If, while your currency is practically limited, industry expands, you are going to get a fall in prices, which fall in prices has been brought about by an artificial financial restriction, and, therefore, is deflation. It is not at all necessary that you should actually reduce your currency in order to get deflation; if the proportion of currency to the needs of industry is reduced, you have deflation, you have a fall in prices, and, as a result of that fall in prices, and also, incidentally, a fall in credit, your industries are going to be ruined and your unemployment increased.
It may be said, and it was said, I think by the hon. Gentleman who moved the Second, Reading of the Bill, that this did not happen before the War—that before the War there was prosperity after the Bank Charter Act; and he gave as the reason the very large expansion of paper in the shape of cheques. It might be that, if some entirely new method for assisting the expansion of currency as needed by industry were invented, even this Bill might not check a revival of trade, but we have no right to assume that anything of that kind will happen. What we have to do is to make provision for expanding trade, and we have to do that by making some provision for expanding currency. There is no ground for thinking that the supplies of gold will come in very rapidly. If anything, they are falling off. The demands for gold in India and elsewhere are, if anything, increasing. Therefore, this Bill, in its normal operation, will limit the growth of currency below what will be required in order to finance trade, and I think that it is likely to do the very gravest injury. I should like, before sitting down, to quote one phrase that was used by the
Secretary of State for War in supporting the Resolutions at Genoa. He said:
The Resolutions come to by the Commission, which this Conference is asked to adopt, constitute a financial code not less important to the world to-day than was the Civil Code of Justinian.
He also said, speaking of these general proposals:
The scheme is based on the most modern and scientific method of economising the use of gold as currency.
That method has not been implemented by the Government. Instead, they are introducing this Bill, which, in spite of what the hon. Member for the City of London said, could perfectly well wait until the Conference suggested at Genoa has been held and the Convention has been passed. It could perfectly well wait until proper inquiry has been made, and, therefore, in my judgment, it ought to be opposed; and it ought to be opposed, not only by Members on this side of the House in the interests of employment, but by all Members on the Conservative and Liberal benches who care for the revival of industry. I believe that some of those industrial Members who sit on the opposite benches have been rather jocularly referred to as "The Forty Thieves." If they do not go into the Lobby against this Bill, they will not be the Forty Thieves, but the Forty Fools.

The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans): I regret sincerely that the Chancellor of the Exchequer is not standing at this Box to make a reply to the Amendment which has been moved on behalf of the Labour party. The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) who moved the Amendment did so in studiously moderate terms, and disclaimed from the first any intention of making a party speech or a party attack; and he did, undoubtedly, confine himself to the economic and financial aspects of the case that he was trying to put forward, and succeeded in avoiding anything in the nature of a party attack. As I expected, however, the hon. Member for West Leicester (Mr. Pethick-Lawrence) was a little less diplomatic, and declared his implacable hostility to the Bill in almost the first sentence that he uttered.
Let me ask the House to consider the actual reasoned Amend-
ment that has been put down. It is that the Second Reading should not be assented to by the House in the absence of any policy for putting into operation the resolutions of Genoa, and until an investigation has been made into the constitution, powers and policy of the Bank of England. Let me first deal with that part of it which relates to the resolutions at Genoa. There the hon. Gentleman who spoke last placed too high a value on my services. [HON. MEMBERS: "No!"] I was there only as assistant to the then Chancellor of the Exchequer, my right hon. Friend the Member for Hillhead (Sir R. Home), so long as he was at Genoa, and subsequently as substitute for him when he was obliged to come home. It is true that I had to propose those resolutions to the Conference, but that was because my right hon. Friend was not able to be there. What is the complaint? I am very fond of those Genoa Resolutions; I will not withdraw a word of what I said about them. I believe that they have been of great value to the whole of Europe in the last three or four years as pointing the way to a restitution of sound economic and financial conditions. They have been largely carried out so far as this country is concerned. The right hon. Gentleman is anxious to know what the policy of the Government is. The policy of the Government is to carry out those resolutions. Let me remind him what the resolutions were. The first said that
The essential requisite for the economic reconstruction of Europe is the achievement by each country of stability in the value of its currency.
The Government have carried that out by basing our currency on gold, and so ensuring stability. The second resolution, which is of immense importance, is:
Banks, and especially banks of issue, should be free from political pressure and should be conducted solely on lines of prudent finance. In countries where there is no central bank of issue one should he established.
This Bill will remove the currency notes from the control of the Government for the time being and place them under a hank entirely free from political pressure. The next two resolutions were that there should he a common standard for the currencies of all countries and that this standard should
be gold, resolutions which we for our part have carried out. Not only have we carried these resolutions out, but we have lent all our powerful financial aid to other countries in Europe so that they should also carry them out, and we find that Holland, Belgium, Italy, Poland, Austria, Hungary, Greece and Norway all have their currencies allied to, or based upon, a gold standard, and in practice Germany and France are also so situated. Other resolutions called attention to the necessity for balancing the Budgets in order that no deficits should be made up by the issue of currency notes. In this country, we have not only balanced our Budget for years, but we have succeeded in adding to our reserves. Another resolution is that each country should fix a gold value for its monetary unit. Fortunately for us, we have not had to consider that question seriously, because our monetary unit is of the same value now as it was before the War.
The right hon. Gentleman and the Seconder of the Amendment have called attention to Resolution 9. That resolution requires a little further consideration than they gave it. Perhaps for greater accuracy I had better read it. Referring to the eight previous resolutions it says:
These steps might by themselves suffice to establish a gold standard, but its successful maintenance would he materially promoted not only by the proposed collaboration of central banks but by an international convention to be adopted at a suitable time. The purpose of the convention would be to centralise and coordinate the demand for gold and so to avoid those wide fluctuations in the purchasing power of gold which might otherwise result from the simultaneous and competitive efforts of a number of countries to secure metallic reserves. The convention should embody some means of economising the use of gold by maintaining reserves in the form of foreign balances such, for example, as the gold exchange standard or an international clearing system.
The right hon. Gentleman complains that he does not know the policy of the Government, and I tell him the policy of the Government is to carry out that resolution, as they have already carried out the other resolutions of Genoa, at the proper time, for he will remember that the resolutions did not contemplate that it would be possible to have an international convention immediately. It
was contemplated that when the other nations had set up the central banks, had stabilised their currency, had set up a gold standard, and had carried out the other resolutions, at the proper time such an international convention would be called in order to see how far it would be possible to economise gold. But the right hon. Gentleman must remember that any convention depends, not upon this Government or upon the Bank of England; it depends upon other countries as well as ours, for it takes, in this case, more than two to make an international convention of value in the sense that Genoa advised. In due course I have no doubt such a convention will be carried out. There have in the meanwhile been, as is well known, very frequent meetings between the controllers of the central banks, and I am certain the Bank of England and the Governor of the Bank can be trusted to promote international co-operation at the earliest possible moment. But it should be remembered that no Government can compel a convention. Indeed, the resolutions themselves are based upon the central banks being free from Government control and left to carry out international conventions and other things at their own time and on their own volition without political pressure. I am indebted to the right hon. Gentleman himself for the quotation I am going to read. In a very interesting article in "The Banker" he quoted the evidence given by Mr. Montague Norman, the Governor of the Bank, with regard to his policy in connection with central banks. I quote this in support of my statement that we can rely upon the Bank of England forwarding and furthering resolution 9 as they have already forwarded and furthered the other resolutions of the Genoa Conference. Mr. Norman was giving evidence. This is the quotation:
When all the European currencies have been stabilised it may not be long before the banking resolutions approved by the Powers at the Genoa Conference come into play. A deliberate and concerted attempt will then be made by the central banks of Europe to prevent undue fluctuations in the future value of gold.
That is the undertaking in evidence, to carry out, as far as he can, the final resolution, which has not yet been completely implemented, of the Genoa Conference. So much for the right hon.
Gentleman's demand to know what the policy of the Government is with regard to the Genoa Resolutions. It is to carry them out.
Secondly, the Amendment is based upon a desire to have an investigation into the powers and constitution and policy of the Bank of England. I ask myself what case has been made by the Opposition for such an investigation. After all, if you are going to have an investigation, the onus is upon you to say on what ground you think an investigation is necessary. Is it that the Bank of England has abused its powers? [HON. MEMBERS: "Yes."] Some hon. Members think "Yes," but not the right hon. Gentleman. He, on the contrary, paid a very well-deserved compliment to the governor of the Bank of England for the immense value he has been, not only to this country but to Europe. Where has been the failure? Is it that they have failed in carrying out the powers they have? There really has been no case whatever made out for this investigation. Of course, as a political manœuvre I can understand this part of the Amendment. The right hon. Gentleman's party is not agreed. He has been speaking to-day in a way on which I would willingly compliment him, but there are others in the party who do not in the least agree with him.

Mr. MAXTON: The right hon. Gentleman is not entitled to draw from a cry or two of dissent that hon. Members on these benches disagree with the opinions of the Front Bench in toto when they only disagree over details.

Sir L. WORTHINGTON-EVANS: I did not want to trouble the House with any quotations, but it is really quite simple, because the hon. Member's party has produced a Labour Year Book, in which their policy in regard to banks has been quite clearly laid down. I will read one sentence:
The course of events immediately preceding the beginning of the trade depression is one of the strongest arguments for the transference of the key industry of banking to national ownership and control.
That is not the policy the right hon. Gentleman has been putting before the House to-day.

Mr. MAXTON: The policy my right hon. Friend has been putting forward is outlined in the Amendment, which I do
not think is exclusive of the resolution which the right hon. Gentleman has just read.

Sir L. WORTHINGTON-EVANS: I listened very carefully to the right hon. Gentleman's speech. He did say he did not like putting the notes in the hands of the Bank of England as at present constituted. He did indicate that there should be a body upon which labour, and the Board of Trade, and co-operative societies, should be represented, but I understood him to disclaim absolutely that there should be a national bank, a bank nationalised, as the policy apparently of the Labour Year Book indicated. A public corporation from which political pressure should be removed entirely and over which the Government as such should have no control—that, of course, is quite different. If there is any doubt about it, I will read some more.
The power of finance is the stream that makes the mills of industry go round, and whoever controls it controls them. A banking system attached to the State is essential.
That is from the "Story of the I.L.P.," upon which the photograph of the Leader of the Opposition is placed, and there is a foreword to that valuable document written by the Leader of the Labour party. If my memory serves me right, the right hon. Gentleman himself has a difference of opinion with or is no longer a member of the Independent Labour party. I was saving that the right hon. Gentleman the Member for Colne Valley wisely says that he would rather not make this a party matter. I was complimenting him upon the ability with which this Amendment was framed, for it is a sort of cover intended to bring in all his followers, whether nationalisers or not. And since then we have had the Member for West Leicester inviting 40 of my friends whom he called by opprobrious names to come in and join them. So it was intended as a Parliamentary blanket to cover quite different opinions. Of course, when the hon. Gentleman the Member for West Leicester deals with this question, I cannot help thinking that he does not want an investigation. He cannot want an investigation, for he seems to have made up his mind long ago, and he is the financial expert, I
understand, of the Independent Labour party—[HON. MEMBERS: "No!"]. Here is a little document called "Socialism and Finance," by F. W. Pethick-Lawrence, M.P., and it contains 10 studies which are to be used as the basis of the study circles of the Independent Labour party. I will not trouble the House with the first nine, although one of them does tempt me, for it is headed, "Public Ownership of Banks." But I must, in case I do him an injustice, remind him of the tenth one. He says—it is after nine lectures; this is the tenth, called, "Constructive proposals":
One of the early actions of a Socialist Government will therefore be to secure that all decisions of the Bank of England which are of vital national concern, notably alterations in the Bank Rate, shall be subject to consultation with, and control by, the Treasury.
[HON. MEMBERS: "Hear, hear!"] And now he cheers that statement. He supports an Amendment refusing to go on with the Second Reading of this Bill because the Government have not carried out the Genoa resolutions. The second resolution, which I read in detail to the House, was that the central banks should be free from political control. Now, he is cheering his own statement that the decisions of the Bank of England should be subject to Treasury control.

Mr. PETHICK-LAWRENCE: Does the right hon. Gentleman himself suggest that the decisions of the Bank of England with regard to the Bank Rate should not be subject to consultation with the Treasury.

Sir L. WORTHINGTON-EVANS: That is not at all the hon. Gentleman's lecture. He really must go to his own classes. Not subject only to consultation with, but to control by the Treasury, and that is precisely the political control which, the House can take it from me, we agreed at Genoa was not to be exercised. I say, therefore, that there is no necessity for any further inquiry at this moment into the control of the Bank of England, for an inquiry has already taken place, and the right hon. Gentleman forgot the fact when he called our attention to the addition made to the reference of the Cunliffe Committee. He called our attention to the fact that there was an addition made to the reference of the Cunliffe Committee, that addition being to consider the working of the Bank Act and the constitution and functions of the Bank of
England with a view to recommending any alterations which might appear to them necessary or desirable. I understood him to say that the only report in answer to that reference was that the form of return by the Bank of England should be altered. I understood him to say that. I did not understand him to tell the House that there was a report, not the interim report but the final report, by the Cunliffe Committee which dealt with that reference, and as he did not make that clear to the House, I propose to read it. It is only a short paragraph. I will read what the Cunliffe Committee said in their final report. Under paragraph 4, "Bank of England," they say:
The principles of the Bank Charter Act of 1844 were fully considered by us in our Interim Report. We have examined with care the opinions there expressed in the light of certain criticisms which have been made with regard to them. We see, however, no reason to alter our conclusions. We have again considered the principles governing the banking systems of the principal foreign countries, and we are satisfied that they are not so well adapted to the needs of this country as those contained in the Act of 1844. Certain important alterations which experience suggested to be desirable have been made in the constitution and management of the Bank during the War, and we do not now think it necessary to make any further recommendation.
Therefore, what actually happened was that there was, as the right hon. Gentleman said, an addition to the reference of the Cunliffe Committee. The Cunliffe Committee took that matter into consideration and reported that the Bank Charter Act, 1844, was the line upon which they recommended action, and that is the recommendation which we have followed. It is said that that was before the Genoa Conference. It was. The subject was again considered by the Bradbury Committee set up by the right hon. Gentleman himself in 1924, which reported in 1925. The broad effect of their report was to confirm the advice given by the Cunliffe Committee. If any further investigation were entered into now, it would merely delay action upon this Bill. It would create uncertainty when, in fact, what is wanted is a policy of continuity and stability, and this Bill is the completion of the action already taken.
If I may, for a moment, I will answer questions which have been put to me
and deal with arguments which have been advanced from the other side, on what is really the centre of this Bill, that is, Clause 8—the question of elasticity. The right hon. Gentleman objected to the figure of £260,000,000 being fixed as the figure in the Bill. He said that, while not being an inflationist or deflationist, he thought it left no margin, and he was afraid that it would be found to be restrictive. He went on to state that any increase in the fiduciary issue must be covered by gold and that if there were an increase under Clause 8 that would lead to a scramble for gold. I am stating that correctly, I hope. [Interruption.] That is very good. If that were really so, if the fiduciary issue had to be covered by gold, I could understand the objection, but that is a mistake.

Mr. SNOWDEN: Perhaps I did not explain myself very clearly to the House. If there had been any increase, it must be in the form of bank notes which are covered by the gold.

Sir L. WORTHINGTON-EVANS: That is, of course, exactly the same thing. Bank notes covered by gold or gold are synonymous. But that is the mistake. If the fiduciary issue is increased under Clause 8, it will not be covered by gold. It will be a fiduciary issue covered by securities in precisely the same way as the £260,000,000, and that mistake really explains a great deal of the opposition that the right hon. Gentleman feels. If the only way of increasing the fiduciary issue was in collecting more gold, then indeed there might be the restriction which the hon. Gentleman feared, but that is not so. As regards the margin, my hon. Friend explained and gave the figures as to how the £260,000,000 was arrived at. That £260,000,000 in itself shows a margin of about £1,250,000. That is, deducting the estimated £6,000,000 of Irish issue from the gross total of £264,750,000, we get down to a margin of £1,250,000 in the £260,000,000. It must be remembered that that is the margin on the maximum of the year. The margin on last week's account, I think, is between £7,000,000 and £8,000,000. The margin on the 2nd May—I have the return for that week more accurately in my mind—was 29,000,000. What we have, therefore, in the figure of £260,000,000 is a margin of from £7,000,000 to £9,000,000 on the last two
weeks issue of currency notes, and upon the maximum we have £1,250,000. If that, was all, I would at once say that it was insufficient. I do not for a moment claim that it would be safe to pass this Bill upon that margin alone, but that is not the position.
There is a power given under Clause 8 for the Bank of England to apply for leave to increase the fiduciary issue, and for the Treasury, if it so agrees, to increase it beyond £260,000,000. I want to emphasise the fact that that power is not a mere substitute for the old crisis letter. In order to emphasise that, let me remind the House of the conditions under which the crisis letter was issued. There were four occasions—in 1847, in 1857, in 1866 and in 1914—when crisis letters were issued. In 1847 and in 1866, although the letter was issued, it was not, in fact, acted upon. The mere fact that the Bank were authorised to continue to pay deposits in notes even though the payment would involve an excess of notes over the authorised issue, was enough to still the panic, and the letters were not, in fact, acted upon. In 1857, the letter was acted upon, and the statutory maximum was exceeded by, I believe, about a couple of million pounds. In 1914, the letter was issued, and there were, in fact, two days on which the legal maximum was exceeded. On the 7th and 8th August, 1914, notes were issued in excess of the Bank's limit.
7.0 p.m.
As a matter of fact, at that time the Currency and Bank Notes Act had been passed and that gave the Treasury the right to give statutory authority to the letter. If you search the Bank Return, you will not find that there was an increase in that period, because the increase was made good by currency notes. Upon each occasion, when that letter was applied for, there was an actual and existing crisis, and it was always recognised that the letter should not be asked for except in an emergency. That is perfectly natural. I will tell the House what the letter was. It was a request to the Governor of the Bank to continue to pay the Bank's depositors in notes and to break the law by issuing more notes, irrespective of the restrictions placed upon the Bank by the Bank Charter Act, and an under-
taking by the Prime Minister and the Chancellor of the day that they would bring in a Bill to the House of Commons to indemnify the Governor of the Bank for breach of the law. One can imagine the hesitancy with which the Governor of the Bank and the Prime Minister and the Chancellor of the day asked for and agreed to the issue of such a letter. But Clause 8 of the Bill makes a statutory provision intended to be used, not reluctantly and with hesitation in time of crisis, but whenever the Governor of the Bank feels that the present limit on the fiduciary limit is unduly restrictive, to be used, not in defiance of the law, but in accordance with the statutory provisions intended for the purpose.

Mr. CONNOLLY: You are conniving at an illegality.

Sir L. WORTHINGTON-EVANS: Not at all. The hon. Member is missing the point. We are replacing an illegality by a legal power intended to be used, not in a crisis, but before the crisis arrives. I do not pretend to be able to forecast every contingency which may cause the Governor of the Bank to make the application, and which may make the Chancellor of the Exchequer of the day agree to an increase in the fiduciary issue; but let me examine some of the possible eventualities, some of which have been indicated by the hon. Member for West Leicester and others. An emergency of the type of the crises of 1847, 1857 and 1866 may never recur. Just as in 1847 and 1866 the knowledge that the letter had been issued to the Bank prevented a run upon the Bank, so the provision made in Clause 8 may itself prevent the panic from which these crises arose.
But a new kind of emergency has become possible. Now that the foreign banks have adopted the practice of accumulating a large reserve of sterling bills, it is always possible that, owing to a change in policy upon the part of those banks, a large sum of gold might be withdrawn in a short time by the realisation of those balances. The probability is that such a measure would be avoided by co-operation amongst the central banks, as was indeed advised in the Genoa resolutions. But if the withdrawal of gold was insisted upon, it might become necessary to extend the fiduciary issue, and that would be an
occasion which would justify the Governor of the Bank in asking for that expansion, and the Treasury in granting it.
A third contingency is the possible competition for gold among the central banks. It is quite true that the absorption of gold by any country of considerable economic importance is a matter of international concern. The supply of gold for monetary purposes can only change very gradually, and the value of gold in terms of commodities is principally governed by the demand. The demand is created by the currency legislation of the various countries. If the central banks were to absorb gold without regard to each other's actions they would find themselves competing for a limited supply, and a rise in the value of gold, or, in other words, a fall in the price level calculated in any gold currency, would inevitably ensue. Should the Bank of England find that, owing to a world demand for gold, credit would be unduly restricted, not as a check on speculation, but to the injury of legitimate requirements, then the Bank can request the Treasury to extend the fiduciary issue and so free gold in the hands of the Bank for further credit operations.
Moreover, the principle of a fixed fiduciary issue itself necessitates some provision being made for normal growth. It was only by an accidental combination of circumstances that the Act of 1844 did not require an expansion of the fiduciary issue from time to time.
As my hon. Friend pointed out, at the time when the Bank Charter Act was passed the bank note was the principal credit instrument of commerce and had it remained so the natural development might easily have raised the paper circulation of £30,000,000 to £150,000,000 or even to £200,000,000 in 1914, and the old fiduciary limit would have become manifestly inadequate. The rise was only saved by the gradual displacement of bank notes by cheques. The net circulation in fact never appreciably exceeded £30,000,000. It remained practically constant for 70 years notwithstanding the immense industrial and commercial development and it may be that in the course of the years to come with an increased population and, as we hope, greater employment, greater earnings, greater expenditure and a higher
standard of comfort of the people, the currency of the country will require a permanent expansion. The provision in the Bill for increasing the fiduciary issue is not intended therefore to be a mere legislative substitute for the crisis letter. On the contrary it is intended to be used not in a crisis but before it and to prevent undue stringency arising from any of the causes I have mentioned.
The Bill has this advantage. It allows a tentative change in the first instance before Parliament is called upon to legislate. A period of two years during which temporary changes can be tried and the results watched is allowed and if the reasons for the increase appear to be permanent Parliament can be so advised and by legislation the fiduciary limit of £260,000,000 can be extended. I ought also when I am dealing with elasticity to call attention to the power given under Clause 2 to reduce the maximum of £260,000,000 by the Treasury upon being requested by the Bank of England. Of course though it does not seem likely at the present moment it may be that too much gold may come to London. If at a time when credit conditions were easy there was a large influx of gold an unnecessary number of notes would be issued. In order to check the unnecessary creation of credit the Bank would have to sell securities to take the place of the notes, and it is obvious that the Bank cannot be expected to do this on a large scale or for a long time, and it is in order to relieve such a position that the Bank may apply and the Treasury may agree to a reduction of the fiduciary note issue. I do not want in a matter of this sort to dogmatise in the least but I do think that those who are afraid that this Bill is going to cause restriction on legitimate credit operations and so affect employment have a completely erroneous conception of Clause 8. Of course if the fear of the right hon. Gentleman that the fiduciary issue can only be increased by a gold backing is generally held then I can understand the opposition, but that is really not the case. Gold has not to be found for the increased fiduciary issue. There would be no object in increasing the fiduciary issue if that were the case and, as Clause 8 is sufficiently elastic to cover all the fears which have been expressed in this Debate I recommend therefore the House to re-
ject the Amendment which has been put down and to give the Bill a Second Reading.

Mr. GILLETT: The speech of the right hon. Gentleman and the answer he has given to us on the Clause that has been so much discussed show at once the extraordinary difference that there is between the problem as he is looking at it and the problem as we have been facing and criticising it this afternoon. One of the things in his speech that amazed me was the fact that he justified the measures proposed by the Government for an appeal by the Governor to the Treasury for relief at a certain time by taking as an illustration the period in the history of the Bank of England when, in the old days, they went to the Government at a time of great crisis and asked for special help from the Government because there was a great panic in the country. He has compared the emergency that might arise when more notes were required, but he seems entitrely to have thought of it only in the terms of panic conditions. I would say to him at once that that is not the idea we have in our minds, and it was not in our minds that the fiduciary issue, if its enlargement was sanctioned by the Treasury, had to be covered in the form of notes but rather, as far as I am concerned, by securities of some kind.
The right hon. Gentleman assumes that there is going to be a panic whenever a fresh demand is made on the Treasury for permission to issue a larger number of notes. I should like the right hon. Gentleman to understand that what we have in mind is a gradual expansion of trade, a tide slowly advancing year by year which, with improved trade, will mean that a larger number of notes are required year by year, just as we have seen in the last few years a diminution in the circulation of currency notes. Consequently, one day we might come to a period when it would be obvious that enough currency notes had not been circulated for the purpose, and a request would be made to the Government for an increased issue simply to meet the necessities of trade. The right hon. Gentleman has not in any way dealt with that emergency, nor has he shown any appreciation of the position that we are taking up.
The right hon. Gentleman and hon. Members opposite have failed entirely to understand that the basis of our opposition to these changes is that we are frightened of further deflation. That is the outstanding cause of our opposition. It does not very much matter whether we are justified in this fear or not; the point is that the fear which we are voicing is a fear which is held by a far greater volume of opinion than may perhaps be represented on these Benches. It is mentioned in the memorandum which was recently circulated by what is known as the Mond-Turner group of negotiators. They, also, are frightened of deflation. We feel that we are voicing an opinion which is largely held in the country, in many quarters, that the recent policy of deflation carried out by the Bank of England and the Government, whether it was a wise policy or not, has gone hand in hand with an increase in unemployment. Therefore, when the Government have an opportunity, they ought to take steps to allay these fears, in the interests of the Government and also in the interests of the banking community.
I was disappointed with the speech of the Financial Secretary to the Treasury in introducing the Bill. It seemed to me that he was dwelling much more in the region of 1844 than the present time. Although the hon. Member has been looked upon as one who thinks in modern terms, he seems entirely to have been unaware of the great changes that have taken place in the world in connection with the whole principle of central banks. As I understand it, there are two great problems before us in connection with this Bill, and that is why we ask for an inquiry. Hon. Members opposite always turn down any suggestion of what is called political control over the Bank, and one might think from their observations that the general principle in connection with a State bank is to have no political control whatever. The Bank of England has been almost unique amongst the banks of the world in having no connection whatever, practically, with the Government of the country.
There have been two principles in connection with State banks, one has been the principle of the Bank of England and the other has been the principle connected with the United States system. As evidence of the connection between
Governments and State banks, I would point out that the head committee of the Federal Reserve Board in the United States is entirely appointed by the Government. If we go to our own Dominions, we find that in New Zealand the majority of the directors of the Bank of New Zealand, although it is a private concern, are appointed by the Government. The Commonwealth bank directorate is appointed entirely by the Government, who have a State bank. We have many other instances. The Southern States of America have reorganised their banking system a good deal on the lines of the United States plan and in every case you find State connection with the banks by the appointments of directors, or otherwise. In connection with the Bank of Italy and the new banks which have been formed on the Continent, in almost every case we find that the Government of the country in question has some voice in regard to the management and control of the State banks.
The reason we consider this point so very important—apart from the question of nationalisation, which I have not time to go into to-night—is that those who sit on these Benches feel that when the Bank of England is considering monetary policy, the problem of unemployment is not sufficiently considered. Perhaps the House can recall the policy carried out by the French Government and the Italian Government in connection with their financial problems. At certain periods when they began to deflate, the Governments in each case came to the conclusion that the price they were paying in regard to unemployment and the handicap upon industry were too great and, therefore, they altered their policy. The point which we make is that, if you have a State bank absolutely and entirely divorced from Government connection, will it bear these factors in-mind? Theories that may have been excellent at other times may have to be altered to meet the circumstances of abnormal times, and that is where some representative of the State ought to have a voice in the management of the Bank when these very important questions have to be considered. At this time, when we are making this transfer of currency notes to the Bank of England and we are laying down broad lines upon which the policy of the Bank is to be conducted
for many years, we have an opportunity of considering the problem which I have indicated.
The questions that come before us are, first, the problem of the Genoa Resolutions and, secondly, the elasticity of the note issue. The right hon. Gentleman said that the question of a meeting of the representatives of the nations as recommended at Genoa was left to the State banks. The Resolution refers not only to the co-operation of the central banks but to "an international Convention, to be adopted at a suitable time." Therefore, it seems to me that not only was the question of the gold supply of the world referred to the central banks, but that it was the intention that some sort of Convention would be called, the representatives to which, I imagine, would he appointed by the Governments of the States themselves.

Sir L. WORTHINGTON-EVANS: I think I am right in my recollection that it was understood that the Bank of England would call a meeting of certain banks, and that the central banks themselves should enter into a convention for the purpose of economising loans.

Mr. GILLETT: The point that we are anxious about is, that when these powers are being conferred on the Bank of England, the question of the world's supply of gold ought to be very carefully considered, and that that is a point which the Government have now an opportunity of raising. The problem of the gold supply of the world is, that it is thought there will be a diminution in coming years, that there will not be sufficient to meet the needs of the world, and that unless we have some great authorities getting to work upon this problem and trying to think out what is going to happen to the gold supplies, we are in danger of finding that our level of prices will be altered as a result of the shortage of the gold supply of the world. That is the first point we make in our Amendment, and that is why we attach supreme importance to this question. We suggest that before this transfer of notes is made, this question ought to have been considered.
My further point deals with the question of the securities that are to be placed behind the currency notes. Nothing was said by the right hon.
Gentleman as to the kind of securities that are to be used as cover for the note reserve, nor was anything said as to whether the system adopted by some other countries of using bills of exchange for cover, had been considered by the Government and the Bank of England. One fundamental difference between our system and the system in the United States of America is that practically the increased circulation of notes is met by the discounting of bills. I would have liked the Government to consider this point. Instead of fixing a definite limit of £260,000,000 and saying that immediately that limit has been reached the permission of the Government must be sought for any increase, is it not possible that an expansion could be automatically allowed to the Bank beyond the £260,000,000, providing the cover that was put in was not Government security but bills of exchange?

Mr. ROY WILSON: What class of bills?

Mr. GILLETT: Proved bills of exchange. If you have an expansion of trade, it usually goes hand in hand with an increase of the number of your bills of exchange. Therefore at the time when trade was expanding and you want an increased number of notes, you might have these hills of exchange as cover for your notes. There is an additional advantage in connection with this proposal that if you have bills of exchange limited to 90 days, it means that at the end of 90 days the Bank of England has to consider whether the Bill is to be renewed. If the Bills are not renewed the notes have to be withdrawn, but if the notes are still in circulation then the bills could serve as cover. Instead of looking upon the expansion of the fiduciary issue of notes as something that needs to be dealt with when you are face to face with a panic, or when you are in some other great difficulty, I suggest that by considering cover by bills, there might be a quite gradual expansion, say, for another £15,000,000, and if the Government were unwilling to make a larger extension, then the Treasury could be approached in the way indicated.
One of the things from which we are suffering in connection with the whole problem of the Bank of England is that the policy of the Bank of England is
known to so few people. At the present time when the Bank of England has such tremendous directive effect in the money market of this country, it is remarkable that nobody really knows what their policy is. Unlike some of the other State Banks, they never issue a statement of policy, nor do the Government make a statement of policy. If we approach the Chancellor of the Exchequer and ask him certain questions on the subject, he says that it is the business of the Bank of England and, therefore, he cannot give us any information. I believe that a good deal of the misapprehension which has arisen in the City of London and other quarters is due to the fact that we know practically nothing of what the Bank of England is doing. There are other questions which I think the Government should consider—

It being Half-past Seven of the Clock and there being Private Business set down by the direction of the CHAIRMAN OF WAYS AND MEANS under Standing Order No. 8, further Proceeding was postponed without Question put.

PRIVATE BUSINESS.

BERMONDSEY BOROUGH COUNCIL (ST. OLAVE'S GARDEN) BILL [Lords] (By Order).

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

Sir ROBERT HAMILTON: I beg to move, to leave out the word "now" and at the end of the Question to add the words "upon this day six months."
I feel that some apology is due to the House for interrupting a Debate on a highly technical subject, but the question which I am asking the House to consider now is one which is certainly worth considerable attention. It has already been discussed on two occasions in another place, but so far has never been debated in the House of Commons. Let me begin by asking hon. Members to cast their minds back 900 years—this House is capable of doing anything. Nine hundred years ago this country was held to ransom by the Danes. In the summer sailing season they used to come to these shores and loot and burn, and exact
what ransom they could from our people. We used to pay what was known as Dane-geld in order to get rid of them. In those days there was a King called Ethelred the Unready. He was unready to meet the Danes, and so he called in the Norsemen to help him. He called to his assistance a King called Olaf; he was a pagan King. He came to the assistance of King Ethelred; brought his ships up the Thames, mooring them just below the place where London Bridge now stands. The site which is mentioned in this Bill is St. Olave's Garden, and it is called after St. Olave because King Olaf afterwards changed his faith, was killed, and was then canonised.
In return for the services which he had rendered London in saving the city from the attacks of the Danes, which he did by pulling down the timbers of the old wooden bridge, London built four churches to his memory. Only one of these churches remains, and that is St. Olave's in Hart Street, where I believe Pepys used to worship. The church which we are now considering was placed upon the site of King Olaf's camp, and for 900 years there has been a Christian church upon that site. Just across the water on the other side, there is a church of another Norse Saint, an Earl and a martyr, who was foully killed—St. Magnus. These two kings face one another across the Pool of the Thames. Looking from the site of King Olaf's camp, where a church has stood until quite recently, across our famous River Thames, which an old Member of this House has called "liquid history," we see on the one side the beautiful building of the Fishmongers' Hall, then London Bridge itself, then that remarkable new building, a block of business offices, where the Commercial Union is installed, then St. Magnus Church, a few wharves, and custom houses, and then Tower Bridge itself. That is the view you can get from St. Olave's Garden.
Things change in this beautiful world. The church which stood on King Olaf's camping ground for so many centuries at last served no particular purpose. Wharves and warehouses encroached upon it where there used to be dwelling houses, and it was decided that the site might be made better use of than as the site of a church. In 1918 a Bill was introduced into Parliament which provided
that the Church should be demolished with the exception of the tower. I would ask hon. Members to particularly remember that point. It was considered that the tower should be preserved. Half the site was to be sold and the proceeds were to be vested in the General Diocesan Church Fund for the building of new churches in South London. That was a very proper proposal. Half the site was sold for.10,000. It was sold to the proprietors of the neighbouring wharf, Hay's Wharf. I desire to call the attention of hon. Members to the Preamble of that Bill of 1918. It said this:
Whereas the site of the old church is of antiquarian interest, and it is expedient that provision should be made for the preservation of the tower thereof and for the maintenance of a portion of the site of the old church and of the said churchyard as a public open space and for the perpetuation of the name of St. Olave in connection with such site.
Five special objects are set out in that Preamble. The first is the antiquarian interest of the site. If it was of such antiquarian interest 10 years ago, surely it possesses more antiquarian interest now. The next point is the preservation of the tower. This Bill seeks to demolish the tower. The third is the maintenance of a portion of the site of the old church, and the churchyard as a public open space. The present Bill seeks to avoid this and proposes to sell the site and provide another open space in another portion of the borough. Another point is that the name of St. Olave was to be perpetuated in connection with the site. If the Bermondsey Borough Council provide another site half a mile away they may call it what they like, but it will not perpetuate the name of St. Olave in connection with the old historic site. The 1918 Bill went on to provide that no building should be erected on half the site, which should be vested in the Borough Council and maintained and managed by the Council as an open space under the name of St. Olave's Garden.
The tower was not to be demolished but was to be preserved as an access from Tooley Street to the open space. That is a very suitable idea. The old tower stands on the street, and a doorway and entrance could have been made into the open space abutting on the River Thames. The Borough Council of Bermondsey were also to use their best endeavours to secure the removal of the obstruction be-
tween St. Olave's Garden and the River Thames. I should like to ask what the Borough Council have done in this matter. As a matter of fact, they have done nothing. I admit that for a variety of reasons the site did not come into their hands until 1926, but I do not believe that they took very active measures to get it into their possession, and it is quite clear that when it came into their hands in 1926 they did nothing whatever except to place a hoarding round the site; and a, more neglected, shameful and miserable spot, you cannot imagine in the whole of London.
The site itself is covered with a whole lot of building material belonging to the proprietors of Hay's Wharf, who are anticipating the action of this House and are preparing to build on this site before they have even obtained possession. I think it is very necessary that this matter should be thoroughly considered by this House before private proprietors can presume to take this land into their possession as though they can proceed to build upon it before the House has given leave and before Parliament has relieved the Borough Council of Bermondsey of the obligations placed upon it. The tower itself has never been attended to. It is now in a far worse condition than it was 10 years ago, and this is one of the reasons which the Bermondsey Borough Council put forward for pulling it down altogether. The duty was placed upon the Borough Council of keeping the tower in repair, and they now suggest that it should be pulled down altogether because it is out of repair. Let me draw the attention of hon. Members to the Bill now before the House. In the Preamble it is stated:
Whereas the area so vested in the Council as aforesaid (which did not come into their possession until the year One thousand nine hundred and twenty-six) has not hitherto been laid out as an open space on account of its limited extent and of the cost which would be involved in such laying out and the maintenance thereof and of the fact that owing to its remoteness from dwelling houses and the inconvenience of access thereto the said area is not used by the public to any considerable extent, and would he of but little public benefit if so laid out,
What an extraordinary thing to put into the Preamble of this Bill. Why is this open space of no use? It is simply because there is a hoarding round it; it is
covered with rubbish, and this is given as a reason why the site is not to be used. The next paragraph in the Preamble says:
And whereas the said area abuts on the River Thames and it is expedient in the public interest that it should be made available for the construction of wharves and accordingly that the Council should be empowered to sell the same to the proprietors of Hay's Wharf, Limited.
The promoters of this Bill are the proprietors of Hay's Wharf. That is perfectly clear. They purchased one half of the site, and now they wish to purchase the other half. We must not forget that in the Act of 1918 Parliament placed on the Bermondsey Borough Council the obligation of keeping this site for ever as an historic site for the use of the citizens of London. The purchase price which has been agreed to between the Borough Council and the proprietors of Hay's Wharf is £10,000, and the manner in which this money is to be applied is provided for in the Bill.
In Clause 7 it is provided that:
As soon as practicable after the passing of this Act (and in any event before the expiration of two months from the date of such passing) and whether the said sale and purchase shall then have been completed or not the purchasers shall at their own expense demolish the tower (now standing on part of the scheduled lands) of the former Church of St. Olaves, Southwark.
The very first thing to be done is for the purchasers at their own expense to demolish the tower, and this has to be done within two months from the passing of this Bill. They are permitted to demolish a tower which the House of Commons 10 years ago said was to be preserved as an antiquarian memorial. It is a monstrous proposal. In this Clause also the purchasers of the site have to provide a parking space. I should like any hon. Member to visit this site and see how many cars it would be possible to park there. One of the reasons which the borough council have given for not keeping it as a site is that it is a narrow tunnel, just a little window out of which you can see nothing. How can you possibly park 100 cars there; which I believe the hon. Member for Bermondsey (Dr. Salter) in a letter recently said would be possible. The site is only about one-sixth of an acre in extent. It is certainly a congested neighbourhood, as it is at the top of
Tooley Street, but it will not relieve the congestion by making provision to park cars in this small and narrow site.
Further than that, after all these provisions and conditions which the purchasers have to meet, there is an exception which permits the purchasers to set apart loading bays for the loading and unloading of goods and merchandise. If, on the one hand, you are to try to get rid of congestion by allowing cars to park there, on the other hand, it looks as if you increase the congestion by allowing the purchasers to provide loading bays for goods and merchandise. One thing is required of the purchasers. The purchasers may pull down the tower, build wharves on the site and shut out the view, have loading bays to load their cars and lorries, but they must put up a tablet. The application of the purchase price is as follows: The law costs come first, and they will be about £1,000. Then the human remains have to be removed, with the monuments and tombstones, and that work will cost another £500. About £2,000 goes to the Church. I could have understood, if the whole site was being disposed of, the whole of the money going to the Church. The balance of £6,000 goes to the Bermondsey Borough Council. They say that that sum will be very useful to enable them to purchase another site, and also, after allowing Hay's Wharf to build on this site, to obtain rates from the site of the old church. We shall have, instead of a historic site, Bermondsey Borough Council enjoying the fact that it is getting rates from the site and applying the money from the sale of the site, by the sale of the trust placed upon them, to purchase another site of no historic interest whatever half a mile away.
Finally, let me refer shortly to the statement that has been put forward by the promoters of the Bill. On page 2 they state:
That the area available for the public would be practically a narrow tunnel, shut in between high walls of adjacent buildings, dark, sunless and useless for recreative or other purposes. The view from the river front and from the tower would be extremely restricted.
If you have a small window looking over a magnificent view, is it any reason, because the window is small, that you should block it up altogether? This is a window that should be most carefully
preserved, for along the whole of that side of the river, for 3½ miles, there is not one single opening on to the river itself. This opening gives a most beautiful view over a very historical part of the river. Another statement is:
That there are no houses or residences in the immediate vicinity and, in consequence of the extremely heavy traffic in Tooley Street the area could not possibly he employed as a playground for children.
It was not particularly suggested that it should be used as a playground for children, but there are older people who would like to enjoy the opportunity of sitting there. There are plenty of workmen round the docks who would be only too glad to sit there in the dinner hour and get a little sun and air from the river instead of having both cut off by the high walls of warehouses.
Under these circumstances the Borough Council have decided that the site would be not only quite useless as an open space, but would, in fact, be a source of danger and probably a nuisance.
How on earth that has been arrived at I cannot think. Why should they say that this site, if properly opened and tended, would probably be a nuisance? I fail to see the argument altogether. I shall be only too glad to learn from the hon. Member for Bermondsey (Dr. Salter) why a properly cared for site, with nice benches looking over the river, should be a nuisance. They go on:
The Borough Council are anxious that the land should be disposed of to the best advantage, and have entered into a provisional arrangement, with Hay's Wharf, Limited.
That is the whole basis. Hay's Wharf have meant all along to get this site, and they have got round the Bermondsey Borough Council, and they think they have got the site. But they have to get round Parliament first. The promoters say:
The Borough Council will acquire for the purposes of an open space a very desirable but expensive site in Tanner Street, which is not very far distant from the St. Olave'a site in Tooley Street, and which will be an immense boon to a large number of children and residents generally.
The site referred to is undoubtedly a larger site. It is about half a mile away, a long way from the river, and is the site of an old disused workhouse. Half of it belongs to the borough council and the other half they propose to acquire. It is a desirable thing to turn
it into a garden, but there is no reason why they should not do that without disposing of the St. Olave's site. Added to this is the fact that, quite close to the proposed new site, there are already no fewer than six open spaces. I was in one this morning, the old churchyard that has been laid out as a garden with beautiful trees and seats, at the very back of this site in Tanner Street, not 100 yards away. I ask hon. Members how they would regard the proposal if they were asked to exchange 10 yards of frontage of the Terrace here for an acre of land in Rochester Row? You cannot compare the two things. Now we come to the Ministry of Transport. I see that the Minister is present to see what fortune the Bill will have. The approval of the Ministry of Transport has been obtained for this proposed legislation.

The MINISTER of TRANSPORT (Colonel Ashley): There is no question of approval, but support.

Sir R. HAMILTON: I will read what the promoters say:
The Ministry of Transport strongly support the proposed legislation,

Colonel ASHLEY: I said "support."

Sir R. HAMILTON: You do not approve of it then?

Colonel ASHLEY: You said our approval had been obtained. I said the promoters had got our support, which is a different thing.

Sir R. HAMILTON: Rather a fine distinction, but I do not want to quibble over words. I want to take what the promoters say:
The Ministry of Transport strongly support the proposed legislation because the sale to Hay's Wharf, Limited, includes an arrangement by them with the Ministry to provide a parking place for the purpose of relieving the congestion of vehicles at the London Bridge end of Tooley Street.
I have already dealt with that, but if the Ministry of Transport would support a proposal for parking cars at St. Olave's Church they would support a proposal for parking cars in the Crypt of this Palace, and with just about as much reason. The promoters go on:
The church tower itself (which is to be demolished by the purchasers) does not possess any particular architectural interest.
The church tower is a typical tower of the 18th century, and is very charming.

Mr. B. SMITH: You said just now that it was a ruin.

Sir R. HAMILTON: It is a ruin. Why? Because the Bermondsey Council has allowed it to become a ruin, since 1926, when it came into the hands of the Council. Apparently the sooner it falls down the better the Bermondsey Council will be pleased. The promoters say further:
The principal reason for the restriction imposed by the Act of 1918 upon the right of building on the western portion of the site was that it was considered undesirable to destroy entirely an existing open space.
Hon. Members will remember that I have read the Preamble. It does not fairly state what the Preamble of the Act of 1918 states. The object was to keep this as an open space connected with the name of St. Olave's on an historic site, and that it should be kept perpetually for the recreation and benefit of the people of London. It may be said that the people in Bermondsey support this proposal. I admit that there has been a public meeting and so forth. We have heard before now of the famous Three Tailors of Tooley Street who represented the nation of England. At this public meeting the chair was taken by one of the employés of Hay's Wharf, and the resolution proposing the sale to Hay's Wharf was seconded by another employé of Hay's Wharf. The meeting was called for three o'clock on a Wednesday afternoon in January. We can imagine the number 9f people interested who had an opportunity of attending and objecting. The resolution was carried, if not by all present, at least nemine contradicente.
Finally, I would like to remind the House that in this matter the Bermondsey Council were made trustees of this historic site not only for London but for the nation. They have not carried out their trust. By this Bill they are endeavouring to avoid the obligations which were placed upon them by Parliament. The education authorities to-day are endeavouring to interest both young and old in the great historic associations that are to be found in all our old cities, and especially in London. The day may yet come when Macaulay's New Zealander will sit on one of the broken arches of London Bridge and sketch the
ruins of St. Paul's, and—should this Bill pass into law—if he turns his eyes to the south side of the river he will look in vain for even the ruins of St. Olave's Tower, and will wonder what manner of man sat in the Parliament of 1928.

Sir MARTIN CONWAY: I beg to second the Amendment.
8.0 p.m.
If this Bill, the second St. Olave's Church Bill, had been brought forward at the same time as the Bill of 1918, there is not the smallest doubt that it would not have passed. If the proposal had then been made to knock down St. Olave's Church and Tower and to build over the site wharfage buildings, and to give some of the money to a diocesan fund and some to the Bermondsey Town Council, there can be no doubt that it would have been laughed out of the House and thrown aside with scarcely anyone to defend it. But by dint of bringing the proposal on in two stages, the promoters are able to pretend that they have a case which they never could have pretended they had if the whole proposal had been brought forward at once. A few years ago my attention was called to something happening at St. Olave's, and I went down to Tooley Street to find the church. I found it in the hands of the housebreakers, and half of it had already been pulled down. What remained was sufficient to show that the church had had no inconsiderable architectural merit. It certainly was a church which ought not to have been destroyed without a great deal more public attention having been directed to the proposal. The way in which the church was knocked down was indeed a grievous shame. I am told that to-day the tower is in a ruinous condition. When I went there it was not in a ruinous condition, and if it is in such a condition now, then the fault is entirely that of the Bermondsey Town Council, and is probably the purposed fault of that body. It was not merely a question, on their part, of not being anxious to maintain the tower; they were actually desirous that it should not be maintained. In view of their inaction, with the tower falling into decay before their eyes, I say they have wilfully and continuously neglected their statutory duty, which was to maintain the tower. They come before us with unclean hands, in consequence. This church belonged to the Church of
England, and the Church of England is going to get something out of it, supposing this transaction is carried through, but they will not get anything like what they would have got had this proposal been brought forward in a straightforward manner at the start. In that case, the whole of the proceeds of the sale would have gone to the Church, but, as it is, they are only to get £2,500, or some amount of that sort.
The Bermondsey Borough Council had a present made to them of this open space which they now propose to sell. They ought to give it back to the people who presented it to them. They have no business to sell it. I will not go over the history of the site, which has been so excellently told by my hon. Friend the Member for Orkney and Shetland (Sir R. Hamilton). Nor do I propose to repeat his very cogent arguments. He has analysed the Bill and has put the House in possession of all the important facts and I cannot help thinking that any impartial person listening to his speech must see that we have a very strong case against the Bill. I do not know anything about the proprietors of Hay's Wharf, but it seems to me they must "have a pull" on the Bermondsey Borough Council. I am told that several people connected with Hay's Wharf are on that Council and that they have considerable local interests. There is no reason why they should not. There is nothing wrong in that; but that makes it all the more necessary for us in this House to look carefully into a proposal which comes from that source. As to the public meeting held at 3 o'clock on a January afternoon and attended, I suppose, by half a dozen or a dozen people, that is mere eyewash, If you want a public meeting in Bermondsey you must have it in the evening. If you do not want anybody to be at your meeting, then have it at 3 o'clock on a Wednesday afternoon. It is perfectly easy then to say that you have had a public meeting and have received the approval of the people.
Of course this proposal received the approval of everybody connected with Hay's Wharf and the other people would not go. The kind of man who would like to go and smoke his pipe sitting in this open space by the riverside on a summer day, does not foresee what may result if he does not attend a public
meeting on a January afternoon to protest against a proposal of this kind. Such people do not understand what is going to happen and, obviously, the people who would attend such a meeting would be those associated with Hay's Wharf. No doubt they were there, and carried their resolution without opposition but that kind of thing should have no weight with us. To my mind, the most important thing in connection with this matter is to deliver a blow against the Philistinism of borough councils in general, all over the country. The business of a borough council is to look after the immediate and material interests of its people and, I dare say, from that point of view, the Bermondsey Borough Council may have something to say, but our business is to look to the broader aspects of these questions. We are a great historic people and this City of London is a city with a monumental history of the greatest interest to the world. Our business is to maintain the evidences of that history, to keep alive the continuity of the past with the present and to show how our people have come, generation after generation, from the great tide of humanity that has in successive waves passed through this great city, each wave leaving its mark. If we are to knock down first one historic monument and then another, because in the monstrous phrase of this Bill,
it is expedient in the public interest that the land should be made available for the construction of wharves,
then we may take any part of either bank of the river, and say that it is in the public interest that such things should be done there. It is in the public interest, as defined by the people who own Hay's Wharf. It is, of course, very important to them that they should get this site, but those of us who do not own wharves and have no interest in wharves but who have an interest in St. Olave's ancient church, want to see this memorial preserved. We are told that the Bermondsey Borough Council will put up an inscribed tablet. I presume they propose to put it in the wall of a warehouse, but how long will that last? When they did not take care of the tower, will they take care of the tablet? Perhaps one day there may be a change in the movements of commerce. Perhaps some day
Hay's Wharf may go and that warehouse will be pulled down, and then what will happen to the tablet and the inscription? I myself have known three cases of historical inscriptions which were put up on walls and which have since disappeared, two of them being in London. That happened because it was nobody's business to maintain them. If the wall is pulled down the inscription goes.
I trust that this House, the guardian of all the broad and big interests of this country, will take note that the point involved in this Bill—a small point if you like—is still a point of principle and that the proposal of the Bill is a vicious proposal, from the point of view of the interest of this country and its historic past. What is the difference between England and the Dominions? Why are our fellow citizens of the Dominions anxious to come to England Because this is the home of the ancient institutions and the ancient life from which they have sprung. If we destroy our old monumental buildings, that interest will perish. Who will care about England without its monuments? This particular monument is one little link in the long chain which it is our duty to preserve. I am sorry that the Minister of Transport has given any co-operation in this proposal. He seems to have been thinking only about a place for the parking of cars, but I am thinking about the history of Great Britain. It may be said that, in any case, it is a matter of small importance, but I ask hon. Members to think of this little garden on the banks of the Thames with a glorious view across to the stately buildings on the other side. I ask them to think of this little garden, reached through the tower which, if not a very old tower, is one of respectable age and one which was built by the people of that part of London no doubt with pride. I ask them to remember that it is the only spot in three and a-half miles of the river bank where one can see across the Thames from an open space; and I suggest that, from that point of view, this is really an important matter, and I beg the House to refuse to give the Bill a Second Reading.

Dr. SALTER: It is with great diffidence that I venture to oppose my opinion on archæological matters to that of the hon. Member for the Combined English Universities (Sir M. Conway).
I think, however, if he knew all the facts of the case he would regard the position taken up by the promoters of the Bill as unanswerable. I am as jealous as he for the preservation of memorials of the past, but I would ask him to consider again what this church tower is and what it represents. Before going into that part of the question, I turn first to the attacks on the Bermondsey Borough Council for their alleged failure to fulfil their duty since they came into possession of this trust. In fact, although the St. Olave's Church Act was passed in 1918, the Bermondsey Borough Council did not come into effective possession of this piece of land and the tower until late in 1926. Before they came into possession, they gave consideration to the ultimate appropriate disposition of the property. They took excellent advice, but time was necessarily required for the development of the scheme and the promotion of this Bill. No time whatever has been lost by the borough council since they came into possession.

Sir WILLIAM BULL: Will the hon. Member explain the hiatus between 1918 and 1926?

Dr. SALTER: The Act of 1918 placed the original church in the hands of the Ecclesiastical Trust, which was not constituted until some time after the passing of the Act. When it was constituted, its first duty was to dispose of the four-sevenths of the site which had come into its possession. It put up the site for auction. I believe the site was withdrawn from auction and put up again. Negotiations with potential private purchasers went on for a long time and, when all these preliminaries had been completed, the conveyance of the property was not concluded until 1926. When all the preliminaries had been finished, the remaining half of the site, including the tower, was handed over to the Bermondsey Borough Council late in 1926. No possible fault rests with the council in that respect. As far as the people of Bermondsey are concerned, we have been able by diligent search to find one person, and one person only, who is opposed to the project of the Bill. The borough council is unanimous. The Bill is not promoted by any party. Liberals and Conservatives are as enthusiastic in
its support as the Labour members of the council. Every local body that we know of is in favour of the Bill, particularly the University Settlement, the missions and the juvenile organisations of all descriptions. They are waiting eagerly and anxiously for the passage of this Bill and for what will follow as far as the alternative site is concerned.
With regard to the town's meeting, it is true that an employé of Hay's Wharf took the chair, but he happened to be the mayor of the borough and the Statute requires that the mayor of the borough shall take the chair on such an occasion. It so happens that he is an ordinary labourer at the wharf, and he is mayor for this year. It is a pure accident that this year, when we are promoting the Bill, the mayor happens to be an employé of Hay's Wharf. An interesting fact relating to this town's meeting is that, with the exception of this one person, all those who were opposed to the Bill attended, including the Rector of the parish and the Chairman of the Liberal party in Bermondsey, and after hearing the statement of the case by the promoters, they not only withdrew their opposition, but said they would give their support to the Bill. Since that date we have been able to discover, as I say, only one person who is opposed to this Bill, and he happens to be a gentleman who has got Hay's Wharf on the brain. It is a particular bee in his bonnet, as it happens to be a bee in the bonnet of the hon. Member for Orkney and Shetland (Sir R. Hamilton).
The hon. Member for the Combined Universities suggested that the whole of the proceeds of this sale ought to go to the Church. The Bishop of Southwark is an enthusiastic supporter of this Bill, and when the Bill was in the House of Lords he was in his place, ready to defend it and to express his approval of it had it been necessary so to do. The Bill is supported by the Metropolitan Public Gardens Association, which has been at considerable pains to secure assistance on the financial side in order to obtain the alternative site; by the National Playing Fields Fund Committee; by the Carnegie Trustees, who have given us some financial assistance; by the City Parochial Trustees, and by the London Traffic Advisory Committee and the Ministry of Transport;
and I venture to say that when I have finished my statement in support of the Bill, hon. Members of this House who are impartial will regard the case for it as quite unanswerable.
The hon. Member for the Combined Universities talked about the Philistinism of the Bermondsey Borough Council in wishing to destroy this beautiful old tower. The tower has not the slightest architectural or artistic value, and if my voice on that matter is considered suspect, I would like to quote the opinion of the late Marquess Curzon, who, when the original Bill was being discussed in the House of Lords, said:
Nor, again, am I very much interested in the preservation of the tower alone. The tower has no beauty apart from the church; it has uncommon little with it, and apart from the church it will have absolutely none at all. To take down the church and invite the people of Bermondsey to sit, with the wharf on one side and a few tombstones on the other, to enjoy a quiet summer afternoon with this miserable relic looming in the air behind—I would not condemn anybody to a penalty so extreme.
I would not go so far as the late Lord Curzon in his unqualified denunciation of this tower, but, as a matter of fact, it is a late eighteenth-century tower, and it has no historical interest at all. We do not know whether it is on the site of the original St. Olave's Church, and we do not know whether it, is on the site on which Olaf pitched his camp. The great probability is that this particular area where the tower is situate was marsh or under water at that time, and the camp to which the hon. Member referred was much more likely to have been in the immediate vicinity of the alternative site, a quarter of a mile away, which the borough council proposes to acquire.

Sir R. HAMILTON: Is it not a fact that the memorial church—not this particular one—has stood on that site for the last 900 years?

Dr. SALTER: No one is at all sure that the church which was erected in about 1440 or 1450 occupied the site of the original church. There is not a particle of evidence to show that that is the case. I have been into the historical aspects of the matter as closely as I could, and I have searched all the authorities on the subject, but I can find no evidence that that is the case. I am
given to understand that it is practically certain that the particular area occupied by the church and churchyard was marshland at the time when this particular event took place, and when London Bridge was pulled down by the vessels of Olaf. In any case the camp itself was certainly a little further inland and was very much nearer the alternative site which we propose to acquire. The tower is now in a ruinous and dangerous condition, and that is not the fault of the borough council, but the fault of the people who pulled down the church. We had no control over those persons.
The hon. Member for the Combined Universities has suggested that the Bermondsey Borough Council has had some malign and sinister design upon this building, that it promoted a Bill in two stages, and that when it could not get all that it wanted at first, it waited a few years and then promoted a second Bill. The hon. Member is entirely misinformed. The borough council was in no way concerned with the original Bill, which was promoted by the Church of England itself. The authorities of the Church of England ascertained that the parishioners of the original St. Olave's church had completely disappeared. I understand and believe it is the fact that 13 persons, all of them caretakers of warehouses, were the sole resident parishioners of that district. Steadily London had been encroaching on the old residential area, the houses had been swept away, their places had been taken by offices and warehouses, and there was no resident population left. The Church, therefore, promoted a Bill for the demolition of the building, the sale of the site, and, with the proceeds, the purchase of some alternative site elsewhere in the suburbs, where a new church edifice was required.
We have had the tower examined by our experts, and we are advised that it would cost the borough council between £3,000 and £4,000 to stabilise the tower and make it safe for the future. We suggest that that is not a fair charge to be levied on an extremely poor borough like Bermondsey, and we are not in a position to raise the money. There is no view from the tower. When the adjacent warehouse buildings, nine storeys in height, are completed, nothing will be visible from that tower of the river or of the view of which we have heard
so much this evening, except the front of a warehouse on the opposite side of the river. I have been to the top of the tower myself and have examined the position very carefully, and that is not merely my own opinion, but that of others as well. The cost of care and maintenance, caretaker, and so on, would be quite prohibitive from the point of view of a borough situated as Bermondsey is at the present time. This site is less than a sixth of an acre in extent and quite valueless from the borough's point of view. If it were to be taken over by the nation or by the London County Council and maintained by them, that would be another matter, but this poor borough cannot take over this site and maintain it and be involved in considerable capital expenditure for a purpose which, from its own point of view, is quite useless. When the adjacent buildings are completed, it will be simply a tunnel, a sunless, airless tunnel, and a very draughty tunnel in which to sit; and it will not be used, as far as we are able to ascertain, except possibly by some odd people who may work in the vicinity as a place in which to eat their lunch. It is unapproachable by children, because there are no residences in the neighbourhood, and it is cut off by the extremely congested main arterial road. It cannot be used by our young people, and we, from our point of view, cannot consider that the cost of maintaining it as an open space would be justified.
It is an interesting fact that the proposals which are incorporated in this Bill are the very proposals which the London County Council put forward when the 1918 Bill was before the House. The county council put forward proposals in these very terms, and they condemned the use of this area as an open space on the ground that it would be shut in and unfrequented by the ordinary public, and would become the resort of undesirable persons. We shall acquire, for the money obtained by the sale of this space, an open space one acre in extent situated 450–480 yards away, in the middle of a residential district, surrounded by a densely crowded and overcrowded population. There are any number of young people who have no playing place whatever. We shall acquire this area, which is the site of the old workhouse and has already been put up to auction and withdrawn at £16,000. Half of it belongs to
the borough council, and the other half to a body of charity trustees, and they are selling their half to the borough council, on condition that it shall be used as an open space, for £8,000. We ascertained from our technical advisers that the cost of the lay-out and so on will be another £3,000 to £4,000 so that, in order to acquire this alternative open space, we are obliged to raise a sum of not less than £11,000 to £12,000.
The rates in Bermondsey are over 18s. in the £. We are an extremely poor borough, and have no middle-class residential element whatever. We are an entirely working-class borough, and we do not feel that we are in a position to raise all that money. The offer has come to purchase this St. Olave's site for £10,000, and a sum of anything from £5,000 to £6,000 net will accrue to the borough council by the sale. With a grant from the National Playing Fields Fund of £2,000, a grant from the Carnegie Trustees of £1,000, and another grant from the City Parochial Trust, we shall have almost enough to purchase the other site and to lay it out as a playing field. We propose to utilise the ground exclusively as a recreation ground for children and adolescents. We have a large child-population, which is densely overcrowded, and most of the houses in that vicinity have no gardens, many of them even not having backyards. There is no playing place nearer than Southwark Park, which is a mile away, except a little old disused burial ground, which the borough council have purchased, and which is used for net-ball and cricket practice. That space is less than half an acre in extent. The other spaces are churchyards, in which games are prohibited under the faculty by which they are used.
In the whole of that area, with an immense population—an area of half a square mile—there is no space whatever in which children can play, with the exception of this little disused burial ground, which is now caged in. We propose also to cage in the other site. We should like to grass it, so that it should be like one of the playing fields of the public schools, but that is impossible in view of the number of children who will use it. We propose to allocate its use in the evenings and on Saturdays between the various clubs, such as the Boy Scouts,
the Toc H, the Cambridge Mission, and other similar philanthropic bodies, which are doing magnificent work in that locality among the adolescents. During the daytime, we propose that it shall be used by scholars from the adjacent London County Council schools. We suggest that there can be no question from the point of view of the life and health of the coming generation as to the relative values and importance of these two sites. We beg the House not to disappoint the thousands of eager and expectant children who are looking forward to having this new open space.

Sir W. BULL: I viewed with grave apprehension the passing of the Bill in 1918. If a church sells part of its property, it generally lives to regret it. I thought, however, that when certain safeguards were put into that Measure, they would be carried out. Now 10 years later, a second Bill is brought forward, whereby those promises and guarantees have absolutely been abrogated. I speak as a lover of London, and I am strongly of opinion that this nibbling which is going on in all our points of interest, is hurtful to the Metropolis. A large number of visitors come here to find out the spots which are of interest to them, and I am certain that the site of St. Olave's must be of interest to Norwegians, Scandinavians and some of our colonists who come over here to seek out spots of interest. The hon. Member who has just spoken boldly stated that he did not believe that this was the site of the church. He has admitted that London Bridge was there—the wooden bridge—and it is admitted in history that the Danes camped there. It is suggested that London Bridge went further back. I do not think history shows that; it was very carefully built upon two spots of ground and there is no other space, up and down the river for a mile or two, where good foundations could have been laid for a bridge. It is well known that there were on either side geological formations either in chalk or in stone, whereon that bridge was laid, and to pretend that this was not the spot where Olaf started to pull down the bridge is absurd.

Dr. SALTER: The bastions of the original bridge lay at least 20 yards inland from where Tooley Street now
stands, and are covered by the present site of the London Bridge railway approach.

Sir W. BULL: Twenty yards is very different from the area of Tanner Street, or the Tanner Street site.

Dr. SALTER: I am speaking only of the bastions of the bridge.

Sir W. BULL: There is no doubt that a church has been there for many centuries—

Dr. SALTER: Not this church.

Sir W. BULL: —and we are going to destroy all remembrance of it. I implore the House to consider this matter from a sentimental point of view. Think what it would have meant if we could have preserved the site of the old Globe Theatre close by. I believe it was sold for some What a treasure it would have been if we could have preserved that site instead of its being amalgamated in Barclay Perkins' Brewery. Then, again, for 31 miles in Bermondsey the whole of the river is blocked out by wharves and buildings, so that it is impossible to see an inch of the river.

Dr. SALTER: Again I must correct the hon. Member. That is not the case. There are a large number of what are called stairs leading down to the river—not. of course, along the whole of the 31 miles—from any of which infinitely better views can be obtained than from this site.

Sir W. BULL: Those are small stairs, and this is a site on which the people can sit when enjoying the view. I am a little surprised at the Bermondsey Borough Council selling this precious site for a mess of pottage; and in any case I think the money ought to go back to the Church. In another place the Third Reading of this Bill was passed without any discussion at all about it, and it is left to a few of us here who, while not living in Bermondsey, are still fond of Bermondsey and take an interest in Bermondsey, to ask this House to consider carefully what. it is proposed to do in this Bill. It has to be remembered that all the undertakings which were given when the Bill of 1918 was passed are going to be entirely swept away.

Dr. SALTER: Who gave those undertakings? What undertakings?

Sir W. BULL: The undertakings given by the promoters of the Bill of 1918.

Dr. SALTER: But the promoters of that Bill were the Church of England, not the Bermondsey Borough Council.

Sir W. BULL: I do not care whether they were the Church of England or anybody else. If the Church of England has not fulfilled its undertakings, so much the worse for the Church of England. There is no doubt this House would not have passed that Measure in 1918 if those undertakings had not been given; indeed, the promoters of the Bill of 1918 would not have dared to bring it forward if they had not given some undertakings of this kind. With regard to the saving of this piece of ground to the poor, I understand that one of the uses to which the ground is to be put is a parking place for cars. The space is about the size of this House, or rather less. How many cars can you park in such a space? Secondly, it is to be used to provide bays for loading. How are you going to park cars at a place where vans are loading for Hay's Wharf? Then, again, it is said the project will be useful as a means of relieving traffic in that area, but I understand the Ministry of Transport have just given permission for a new line of omnibuses to be run past the end of it. It is said that if the Round House at the corner could be removed there would be a great improvement in the traffic arrangements, but how can that be when the Ministry of Transport are allowing another line of omnibuses to run past this very spot? Another wharf is to be built upon it, which will bring more traffic—more lorries and more carts—and yet we speak of this alteration being made for the sake of improving the traffic facilities. The story does not hang together for a moment. I do not know that there is anything more I wish to say, except that as an old Member of the House I would urge Members carefully to consider the position before giving a Second Reading to the Bill, and I support the Amendment.

Colonel ASHLEY: I suppose I ought to say one word on this Bill, seeing that the Ministry of Transport has been brought into the discussion. From the transport point of view, obviously the Ministry must support the Bill.

Mr. RYE: What!

Colonel ASHLEY: From the transport point of view, the Ministry must obviously support the Bill. [Interruption.] If my hon. Friend will allow me, I will make my case, and then he will know whether it is a good one or not. First of all, I am advised in this case by the Traffic Advisory Committee, one or two members of which I see present—

Mr. ERNEST BROWN: You do not always take their advice.

Colonel ASHLEY: I take it when it is good.

Mr. BROWN: In the matter of railways you do not.

Colonel ASHLEY: The Traffic Advisory Committee are quite clear, as I am myself, that there is great traffic congestion in Tooley Street, and if we can remove from Tooley Street a certain number of the vans which now stand there, and place them somewhere else, it will make a very considerable difference to that congestion. The area which we are discussing to-night is about one-sixth of an acre, which is about twice the size of this Chamber. It is estimated officially, though my hon. Friend the Member for the English Universities (Sir M. Conway) seemed to doubt it, that from 90 to 100 vans can be accommodated on the ground floor of the building which Hay's Wharf will put up there if this Bill becomes law. I submit that to take 100 vans out of the present congestion in Tooley Street will make a very considerable difference. Therefore, I am quite clear that the Ministry of Transport, as a Ministry, must advise the House, for what our advice is worth, that this is a good Bill from the London point of view.
Perhaps I might add a word or two expressing my personal point of view. I came into the House this evening without any preconceived ideas on the general merits of the scheme, and have listened to the Debate. We must try to avoid falling into the error of putting undue importance upon antiquities, while at the same time not omitting to give lovely and old things the consideration which is due to them. The House ought to consider carefully whether those who oppose this Bill on æsthetic
grounds and historic associations have made out their case. Obviously, everybody must be in favour of the idea of substituting one acre for one-sixth of an acre as a place for the recreation of boys and girls and the enjoyment of young people. They must prefer to have this large area in place of an area of one-sixth of an acre, especially when this latter is hemmed in with high buildings and is far removed from where the people live. What is the case made by the opponents of the Bill? They say this is an historic site and that this tower is a beautiful tower, from which one can get a nice view of the river.

Sir M. CONWAY: No, not from the tower, from the site, but not from the tower.

Colonel ASHLEY: But it is said the tower is beautiful, and that it ought to be preserved. With great respect, I cannot agree. It is quite a commonplace tower, of a type of which we see many scores up and down the country, and from the esthetic point of view, I think, nothing will be lost. Finally, I would say that in a matter where such a doubt arises, the House of Commons will surely always give the preference to human beings over dead associations. We must consider the younger generation who are coming on, and see whether what is proposed will give them an opportunity for healthy recreation and games and a wider outlook. Let us not allow old associations, however excellent they may be—and I always support them when I am dealing with old bridges—to cloud our minds to the realities of the situation. I think the Bermondsey Borough Council are doing what is sound and right by their own inhabitants, and what is right as regards London as a whole.

Mr. B. SMITH: It is said that when you have a bad case the best course to pursue is to abuse the other side. I deprecate the statements which have come from the hon. Member for Orkney and Shetland (Sir R. Hamilton) and the hon. Member for the English Universities (Sir M. Conway). It has been argued that Hay's Wharf has a pull on the Bermondsey Borough Council. It has been asserted that the chairman of the town's meeting which considered this question was an employé of Hay's Wharf,
and that he was doing something contemptible. [HON. MEMBERS: "No!"] At any rate, that was the implication. It was argued that the Bermondsey Council came to this House with unclean hands and that this Bill had not been brought forward in a straightforward manner. I think such epithets and such accusations are unworthy of those hon. Members.
As a matter of fact, the Bermondsey Borough Council have not come to this House on their own volition. The Minister of Transport knows very well that I, as a member of the London Traffic Advisory Committee, as far back as 1925, in conjunction with my colleagues, had to make many investigations into the traffic conditions at the top of Tooley Street. There are tramcars in that part of the road which are not permitted to deposit their passengers between nine o'clock and five o'clock for a distance of over 300 yards. If the improvements suggested by this Bill are carried out the workpeople will have the right to a full ride on those tramcars, and this will be a great saving of their energy during inclement weather, and will be a great convenience to them. At one time we met the proprietors of Hay's Wharf and considered with them the whole question of the congestion of the traffic. The suggestion for the improvements asked for under this Bill emanated from the London Traffic Advisory Committee, and not from the Bermondsey Borough Council at all. The council only took up this question 15 or 18 months later, under pressure from the London Traffic Advisory Committee. Hay's Wharf is said to have a pull on the council, but we had to negotiate with Hay's Wharf and they objected to the Minister of Transport laying down that the whole of the ground floor should be used for the parking of vehicles.
Anyone who knows Tooley Street is aware that the congestion is greater there than in any other area of its size in the whole of London. It is not realised that 60 per cent. of the total of the perishable articles of London's food supply goes over the bridge near Tooley Street. The site we are dealing with is at the back of the Butter Market., and if it is going to be used for the purpose which hon. Members opposite desire, the playground would be in damp surroundings of the dirtiest character. Therefore, we urge that that particular site should be used for the parking of vehicles. Much play
has been made of the fact that there is a possibility of loading bays being erected there. Surely, if you can have loading bays in the main streets, you can have them as suggested under this Bill in order to relieve congestion. That is the reason why it is suggested that loading bays should be constructed there.
It is estimated that 100 cars or lorries might be parked on this site. I am told that in Tooley Street it is not an unusual thing for vehicles to remain for eight hours and then go away without having been able to load. Under the conditions imposed by the Minister of Transport we shall be able to eliminate that congestion in Tooley Street, bring order out of chaos, and confer a great benefit upon the public. The hon. Member for Orkney and Shetland has asked us to put our minds back for 900 years. I want hon. Members to project their minds into the future, and see that this old site is taken away. I want the House to consider the joy this change would bring into this very congested area in Bermondsey. The ecclesiastical people in the district have agreed to our proposals, and in return we have agreed to give six or seven times the area, we are taking away for the recreation of the children in a very congested and overcrowded area. I think that fact ought to appeal more to the Members of this House than the retaining of a very ugly old site which may have historical associations so far as the site is concerned, but so far as the Church is concerned it has very little historical interest.
There is hardly any borough in London where the people suffer so much from ill-health because of overcrowded conditions and limited open spaces. This Bill will make it possible to give recreation to a large number of young children. When it comes to a choice of retaining an archæological relic and giving health to the children, then my preference will go for the children all the time. Having regard to the fact that the House of Lords has passed this Bill and the fact that the opposition of the Public Gardens Association and the Noble Lord the Earl of Meath has been overcome; in view of the fact that people who usually oppose such changes as those suggested in the Bill are now not only supporting this Measure but giving it financial aid, I think that is the strongest evidence that the Bermondsey Borough Council are tra-
velling in the right direction. For these reasons I ask the House of Commons to give a Second Reading to this Bill, and assist us to do the right think by the children and the people of London.

Sir BASIL PETO: My only excuse for troubling the House on this occasion is that in 1918, when the St. Olave's Bill was before the House, I seconded the Motion for its rejection on the ground that it was a proposal which was neither one thing nor the other, because it proposed to cut in half a very narrow site, and make a recreation ground for the children in a locality where there were no children to use it, and which, in fact, would create a narrow tunnel under 50 feet wide in frontage, which would be no use for the purposes suggested. At the same time, the Bill would be sacrificing a very valuable business site in Tooley Street close to London Bridge which would be absolutely unsuitable for the purposes suggested. We were defeated 10 years ago, and all that has happened since has been that that valuable site has remained practically unremunerative ever since, and there has been no recreation ground for children. When I see a Bill introduced now, which proposes to make a recreation ground seven times the size of this site, in a suitable position, where there are children to enjoy it, and where they will be able to get to it without being run over by the Juggernaut cars of commercial traffic which go up and down this narrow thoroughfare, I cannot conceive of any reason why any hon. Member of this House should oppose this Measure at all.
This tower only dates from 1730, and is not even an example of Wren; it was designed by one of the pupils of Wren. At the time when I opposed the Bill as it was then, 10 years ago, I made a suggestion, which is not included in the present Bill, namely, that the tower or the church—which then existed—should be taken down and re-erected in one of the populous suburbs of London, where a little historical connection with the past would be valuable, and where it might save some of the cost of erecting a new church. That is not proposed here, but, from the purely aesthetic point of view, I cannot conceive of anyone disagreeing with the hon. Member for Rotherhithe (Mr. B. Smith) as to the relative value of this supposed historial association—a tower buried between warehouses in
Tooley Street, where no one goes to see it, and where, if anyone did go to see it, it would only be thought to be horribly in the way of modern commerce, while its existence means that there are so many children who are not enjoying themselves on a site suitable for their enjoyment. If we pause longer to consider this Bill, it will really be an abuse and waste of the time of the House. I support the Bill, which is exactly what I asked for 10 years ago, as heartily as I opposed the Bill which was before the House at that time.

Mr. HARRIS: The case put forward for the provision of a new playground for Bermondsey is a very strong one, and if the sale of this site would afford the opportunity of providing a playground for this overcrowded area, I would put aside my antiquarian prejudices and support this Bill; but the two things do not hang upon one another. As the hon. Member for West Bermondsey (Dr. Salter) will recollect, the London County Council was asked to embody this proposal in its General Powers Bill, but it did not feel justified in doing so, knowing the history of the site, and the conditions attached by Parliament to its sale. There was a conference between the Bermondsey Borough Council and the London County Council, and the County Council made it quite clear that, as far as they were concerned as the open space authority, they would be quite willing to assist the borough council financially to acquire the site.

Dr. SALTER: I am afraid the hon. Member is misinformed on this point. He was not present at the conference, and I have to assure him, as one who was present, that no suggestion whatever was made that the County Council would be willing to contribute to this scheme. Two years ago we did ask the County Council to assist a similar local scheme, and they refused on the ground that it was of local interest and importance only.

9.0 p.m.

Mr. HARRIS: All I can say is that I was present at the public meeting of the London County Council when the matter was discussed with the local representatives, and it was made quite clear that, as far as the County Council was concerned, they would be prepared to contribute. They ought to contribute. After all, the pro-
vision of this space which is required ought not to be contingent on the sale of property which really does not belong to the Bermondsey Borough Council. It was given to them as a present for a special purpose, and they never paid a penny for it. It is Church money—stolen plate—and they have no right to use the money for this purpose. If a park is necessary, and I believe it is, as a playground for the children in this part of London, it should be bought, and, if the borough council cannot afford it, London as a whole should discharge its duty to the children of London and help to provide the money to purchase the necessary open space. That, really, is the case against this Bill; the two things are not dependent on one another.
It is apparently desired, for some reason or another, that the people should not see the river. I do not know if it is feared that they will thereby be moved to go out to colonise other parts of the Empire. Why should not the children of Bermondsey have the splendid educational advantages of the sight of the great River Thames, with all its historical associations and all its educational value? I am surprised too, that the Labour party should wish to sell a freehold to a capitalist firm. I always thought it was one of their principles not to part with freehold property; but apparently they do not mind parting with freehold property when it does not belong to them, when it is given to them under a trust. Of course, as everyone knows, if the Church had known that, as soon as its property was handed to the borough council, they would sell it, the Church would have had the right to the whole of the money. They got half the money, but they wanted the whole at the time when the Bill was promoted. Parliament, however, in its wisdom, was convinced that it was not right to take part of the site, with all its historical traditions, and remove the whole of the landmarks connected with the church and its history. I hope that the House will reject the Bill.

Colonel APPLIN: I think it is a pity that we have lost sight of the fact that this is not so much an historical monument as a record, although a comparatively modern one, of the first Christian church erected in this country. It seems to me that commercialism and the desire for gain, the desire to go ahead
with commerce, make us lose sight of something which is of great value to our people. However modern and however ugly this tower may be, it is the one monument that exists of the first Christian church in this country. If its destruction would give something of value to the people of this country, one might, perhaps, say as a Christian that one would wish it, but it is going to do nothing, so far as I can see, except give a little tiny space which could quite easily be found elsewhere. There seems to be no reason whatsoever for destroying one of our most ancient memorials. We might just as well in another generation say, "Let us take down the Cenotaph. It is out of date; we want more room in Whitehall; after all, the War is over; let us take it down." I wish to enter my protest against the vandalism of destroying this ancient landmark.

Mr. RYE: The Minister of Transport, very rightly, made an appeal to Members of the House on behalf of the children, and he put it to the House that, when we had to consider the interests of small children, we should not hesitate in passing this Bill. I do not think there is any Member of the House who would not agree with that, if there were no other site available, but in this case it is on record that there is another site. There is the old workhouse site, which is available at any time, and the Bermondsey Borough Council could acquire and lay out that site for the purpose of recreation grounds for the children of Bermondsey. I do not think there is a very great deal in the point taken by the Minister. He then dealt with the question of traffic. He said that by utilising this small space adjoining Hay's Wharf traffic would be relieved, because 100 lorries or vans could be parked on the ground floor of the proposed building. The parking of those vans and lorries will certainly not make for relief of the traffic but will add to the congestion. Tooley Street is narrow and there is always congestion there. I cannot imagine the state of affairs that will occur when the drivers of these vans and lorries endeavour to get through that narrow street and park all those vehicles in that restricted space.

Colonel ASHLEY: It is obviously better that the lorries should stand in a space which is not a public thoroughfare.

Mr. RYE: That is not the point I am making. I am drawing attention to the undoubted trouble that will occur when the drivers of these vans get their vans and lorries into this small space, and the same trouble will occur when they come out. I consider, therefore, from the traffic point of view, things will be worse than at present, more particularly in view of the fact that omnibuses now go down Tooley Street. The hon. Member for Bermondsey (Dr. Salter) referred to the unsuitability of the site. He said it was narrow and hemmed in by high buildings and was approached by a tunnel which we are now told will be 50 feet in width, so it is not such a very small tunnel after all. He generally made out a case which would lead the House to believe that of all the unsuitable sites for an open space wherein people could sit and enjoy a beautiful view of the river and the magnificent buildings opposite this was the very worst that could possibly have been found. Were all these great disadvantages pointed out in 1918 when Parliament decided that this site should be vested in the Bermondsey Borough Council under the Open Spaces Act, 1906? Did anyone on behalf of the Bermondsey Borough Council say, "We do not want this site. It is wholly unsuitable. It only carries with it the burden of an old tower which is in a dangerous condition. It is about the worst possible site in London for the purpose"?

Sir B. PETO: I could not claim to represent Bermondsey, but I put all those arguments before the House.

Dr. SALTER: May I add that the Bermondsey Borough Council had no direct say in the matter? It was not their Bill.

Mr. RYE: Is it seriously suggested that Parliament would have imposed this burden upon the borough council without some very strong objection on the part of the ratepayers of Bermondsey? "Here is something that is of no benefit at all. Here is something that is going to cost £5,000 or £6,000 to keep up. Here is something which has a church tower upon it that is in a dangerous condition." There is not a mention of the dangerous condition of the tower in the Preamble to the Bill. There is a reference to the narrowness and unsuitability of the site, but it was just as small in 1918 as it is
to-day, and yet the borough council were prepared to take it over and to undertake these duties. When we are told the delay is due, amongst other things, to the preparation of the conveyance, that is all moonshine. This piece of land and the church tower became vested in the borough council under the Act of 1918. There was no question of a conveyance. The legal profession bad not even an opportunity of earning 6s. 8d., because there was no conveyance. The borough council were quite prepared to take it. They never objected to taking it, and it is their duty, not merely to their rate payers, but to the people of London, to preserve this small open space adjoining London Bridge, so that people who go to Bermondsey to earn their living may have an opportunity to go to this recreation ground, which was to have been set out under the Act of Parliament and has not been set out, and have one of the finest views in London, and I think their interest should be considered as well as that of the children of Bermondsey. The children of Bermondsey can be looked after by the ratepayers providing an open space on the workhouse site if they so desire.
The solid fact remains that the Bermondsey Borough Council obtained this site for an express particular purpose, and they are now endeavouring to sell it for £10,000. They are not endeavouring to do their duty in the slightest degree. As for the statement that the site is of no value and is not in a proper position for a small recreation ground, I can only give my own experience. Last September I was on a small steamer outside Hay's Wharf and I noticed this site and the remainder of the church tower, which to my thinking is architecturally quite sound and good. I wondered what was going to be done with it and it seemed to me if ever there was an ideal spot which should be retained for the people of London to go to the river side, the one gap we are told in a frontage of 3½ miles, it was that small portion adjoining the wharf. Why can it not be maintained for the people of London? Why should the Bermondsey Borough Council be allowed to barter it away, to ignore their obligations, to sell their mess of potage for a paltry £10,000?

Mr. HANNON: I am opposed to the Bill and I am astounded that the Minister associates himself with the proposal that it should become law. He is himself the custodian of one of the most interesting historical monuments of the country and that he should lend himself to the demolition at the instance of the Bermondsey Borough Council of an historical monument which stands by the River Thames and recalls the beginning of Christianity in these islands is something which will take him a long time to get over. There is a general tendency in these days to sacrifice these ancient monuments in the interests of modern convenience, and it is because the Bermondsey Borough Council wish to destroy this ancient tower, recalling the earliest associations of Christianity—

Dr. SALTER: The hon. Member is hopelessly wrong.

Mr. HANNON: The hon. Member's disagreement with me will make no difference whatever. I hope the proposal will have no support in the House of Commons. My hon. Friend who spoke last has stated the case admirably for the retention of the tower. He says, on his own unimpeachable authority, that its architecture is sound. I agree with that contention, and I very much hope this tendency to destroy ancient monuments associated with the beginning of the Christian Church in this great city will not be endorsed by the House of Commons. I respectfully enter my protest in association with the hon. Gentleman who moved the rejection of this Bill.

Mr. AMMON: I want to say a few words in reply to some of the mistakes to which voice has been given in the discussion on this Bill. In the first place, I think we ought to get our minds clear as to the circumstances surrounding the original Bill in 1918. The Bermondsey Borough Council had no lot or part in it. It was promoted by the Church of England, which desired to get rid of this site, on account of the fact that parishioners had departed, and because money that might come from the sale of it might be used in the erection of new churches elsewhere. The next point is that the dangerous condition of the church tower and all the rest of it were not in evidence at the time the Bill was
under discussion in 1918. The church tower only became dangerous after the demolition of the building which supported it, and it has of course, become increasingly dangerous since then. In spite of what the hon. Member opposite has said, not, I hope, with the deliberate intention of misleading the House, the Bermondsey Borough Council were unable to get possession of this tower or of the ground until 1926. The question of demolition was part of the terms of the agreement, and certain deeds of transfer had to be carried through. None of these things was done until towards the commencement of the year 1926. Until that moment the Bermondsey Borough Council had no right of entry or access to the towel under any conditions.

Mr. RYE: I am sorry to have to interrupt the hon. Gentleman. Does he mean to tell the House that the Bermondsey Borough Council could not have applied for leave to go upon that site for the purpose of shoring up the tower if they thought it was in a dangerous condition?

Mr. AMMON: There is no need for me to tell the House anything of the sort. The House would be aware that it would take some time for the demolition to be carried through, that it was not started immediately, and that it was not the place of the Bermondsey Borough Council to make application before the whole thing was ready for them to take over. Had I been in the House at the time this matter was discussed in 1918 I would have opposed the passing of that Bill, as I opposed, at a later date in this House, the attempt to pull down certain city churches, which I opposed on altogether different grounds. Those grounds have entirely disappeared. The fabric itself has gone, all the sacred associations have been dispersed and dissipated, and there is not the slightest architectural or historical value attached to the church as a church, or to the tower. My hon. Friend the Member for West Bermondsey (Dr. Salter) has already read to the House a pretty strong condemnation from the artistic and architectural point of view voiced by the late Marquess Curzon in another place, and in the discussion that took place quite recently in another place the Earl of Donoughmore gave expression to the fact that the building was a bad example of
a decadent and an uninteresting past. Lord Peel also said that it was of no æsthetic importance. Anyway, they are opinions worthy of consideration and should do a great deal to discount much that has been said in this House to-night.
I am interested in this question from another point of view. I happen to be a resident in Bermondsey, and I know something of the conditions by actual experience and association with this particularly congested neighbourhood. Hon. Members should bear in mind that this spot is the centre of the provision trade in this country, and that it is approached through a bottle-neck known as Duke Street Hill leading to Tooley Street, which is so crowded at certain hours of the morning that the trams are not allowed to carry their complement of passengers to the tram terminus. It takes hours, as has already been said, for many of the vans to reach there. It is not an uncommon thing for vans and cars unable to get their loads to have to stand there for long periods during the congested hours of the day. We have heard nonsense talked about opening up the place for the benefit of little children. There are no little children residing within at least a quarter of a mile of the place, and they would have to cross a thoroughfare which even men and women are only able to cross now at the risk of their lives. It is preposterous to think of using the site for that purpose. Surely it does not need a great deal of argument to point out that if you could obviate, say, 100 lorries from the necessity of standing in front of the provision warehouses by placing them in a proper parking place, you would do a tremendous lot to remove the congestion in that area, and, incidentally, do a great deal indirectly in the interests of the commercial activity and prosperity of the people concerned in that particular trade.
As to the historical statements that have been made, really I am sure that the hon. Member for the English Universities (Sir M. Conway) must have shuddered when he heard those supporting him say that on this site stood the first Christian Church. I suggest that it is a long way from Glastonbury, anyway, and almost equally as far from St. Martins, Kent. The promoters of the Bill come with the authority of the support of the Church for
this Bill because it hopes to get some measure of financial assistance in order to carry out extensions in other parts. Speaking from an intimate acquaintance of the district extending over something like 30 years, I say that the spot will not give you anything like a view of the river. You simply look down a narrow alley-way across the river to the opposite bank and on to another wharf or building. That is all one can see. It is all nonsense to talk about what can be seen. If one stands on the top of the tower when the buildings which are now being erected are completed, he will be a long way below the top of the walls on either side. That is the actual physical situation. The architectural points stand for nothing, while the history given by the opponents of the Bill is all wrong. I will quote an extract from a report made in 1918 by the Chairman of the Parks and Open Spaces Committee of the London County Council:
The Chairman of the Parks Committee was of the opinion that the very small piece of land, containing about 358 square yards, which would be available as a public open space under the scheme now put forward by the promoters, would be useless for such a purpose. We concur in this view and are of opinion that the proposal should be opposed. We think that, if the Bill is proceeded with, the arrangement which was tentatively agreed between the Council and the promoters is, in the circumstances, the only practicable arrangement.
This is a very serious matter from another point of view. I know from firsthand knowledge that Bermondsey as a district is one of the most crowded in the whole of London, and one of the poorest. It has not a single open space in it, with the exception of one or two churchyards which have been laid out as gardens. Southwark Park is a long way off. It is of first-class importance, now that they have an opportunity of securing a recreation ground right in the heart and centre of this teeming population, that they should be given the chance to accept it, and, in exchange for it, to give a small parcel of ground that is of no practical value whatever, which cannot afford any recreation to the children, and which will undoubtedly, by its very situation, afford a rendezvous for very undesirable characters. It is not the only opening along that 3½ miles of river front, for the so-called stairs at Cherry Garden and Horsleydown give a very
much better view of the river than is obtained from this site. I talk as one who knows something of the situation. We are asked to give that up, and also for the demolition of a tower which is not of the slightest historical value and has no associations, and in regard to which it is very, very doubtful whether it is the site at all of the original church, which was quite probably a little further down, nearer Guy's Hospital. We are asked that this should be given up in order that a larger piece of ground may be secured capable of providing healthy recreation for the children in this teeming population, in a district where there is a continual flow of heavy traffic, bringing danger to life and limb of these little ones. I refuse to think for one moment that there is any considerable section of the House who will not vote for this Bill and come down on the side of the children.

Mr. SOMERVILLE: I should like to ask one question. The hon. Gentleman said it was necessary to sell a site in order to acquire an open space for the children. The hon. Member for West Bermondsey (Dr. Salter) also referred to that point, but he told us that there were large subscriptions towards the purchase of another site. Is it necessary to close this site in order to purchase the other one? As far as I can make out, it would only be necessary for Bermondsey to raise £3,000 or £4,000 in order to purchase the other site, and yet not close the site in question. It seems to me a very odd thing that the hon. Gentleman who has just spoken told us that there were no open spaces in this district, or very few, and then proposed to close one of the most picturesque open spaces in the district. The hon. Member for West Bermondsey told us it would be very difficult to find in Bermondsey any resident who was opposed to this Bill. As a matter of fact, I know a resident who has considerable interest there amongst the young people, and he asked me to oppose this Bill.

Dr. SALTER: He is the gentleman to whom I referred. I said we had discovered one.

Mr. SOMERVILLE: I doubt whether this is the same gentleman. He asked me to oppose the Bill on the ground that it is proposed to close this beautiful view of the river, and to close to young
children and a number of old people and working folk an opportunity of quiet time. On these grounds, I feel bound to vote against the Bill.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 149; Noes, 87.

Division No. 122.]
AYES.
[9.30 p.m.


Adamson, W. M. (Staff., Cannock)
Hammersley, S. S.
Ramsden, E.


Alexander, E. E. (Leyton)
Hardie, George D.
Reid, Capt. Cunningham (Warrington)


Amman, Charles George
Hayday, Arthur
Reiner, J. R.


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Henderson, Rt. Hon. A. (Burnley)
Richardson, R. (Houghton-le-Spring)


Atholl, Duchess of
Henderson, T. (Glasgow)
Ritson, J.


Attlee, Clement Richard
Hilton, Cecil
Rodd, fit. Hon. Sir James Rennell


Baker, J. (Wolverhampton, Bilston)
Hirst, G. H.
Samuel, A. M. (Surrey, Farnham)


Baker. Walter
Hirst, W. (Bradford, South)
Scrymgeour, E.


Barclay-Harvey, C. M.
Hollins, A.
Scurr, John


Barker, G. (Monmouth, Abertillery)
Hudson, J. H. (Huddersfield)
Sexton, James


Barnes, A.
Hume, Sir G H.
Shepherd, Arthur Lewis


Barr, J.
Hurst, Gerald B.
Shinwell, E.


Batey, Joseph
Jackson, Sir H. (Wandsworth, Cen'l)
Short, Alfred (Wednesbury)


Betterton, Henry B.
John, William (Rhondda, West)
Smith, H. B. Lees- (Keighley)


Bondfield, Margaret
Johnston, Thomas (Dundee)
Smith, Rennie (Penistone)


Broad, F. A.
Jones, Morgan (Caerphilly)
Snell, Harry


Bromfield, William
Kelly, W. T.
Snowden, Rt. Hon. Philip


Bromley, J.
Kennedy, A. R. (Preston)
Spender-Clay, Colonel H.


Burgoyne, Lieut. Colonel Sir Alan
Kennedy, T.
Sprot, Sir Alexander


Charleton, H. C.
Kirkwood, D.
Stephen, Campbell


Cluse, W. S.
Knox, Sir Alfred
Stewart, J. (St. Rollox)


Colfox, Major Wm. Phillips
Lamb, J. 0.
Storry-Deans, R.


Compton, Joseph
Lansbury, George
Styles, Captain H. Walter


Connolly, M.
Lawson, John James
Sueter, Rear-Admiral Murray Fraser


Couper, J. B.
Lee, F.
Sullivan, J.


Courthope, Colonel Sir G. L.
Lindley, F. W.
Sutton, J. E.


Cove, W. G.
Lowth, T.
Templeton, W. P.


Culverwell, C. T. (Bristol, West)
Luce, Major-Gen. Sir Richard Harman
Thompson, Luke (Sunderland)


Dalton, Hugh
Mac Donald, Rt. Hon. J. R. (Aberavon)
Thurtle, Ernest


Davies, Rhys John (Westhoughton)
Mackinder, W.
Tinker, John Joseph


Day, Harry
Macnaghten, Hon. Sir Malcolm
Townend, A. E.


Dennison, R,
Malone, C. L'Estrange (N'thampton)
Trevelyan, Rt. Hon. C. P.


Dixey, A. C.
March, S.
Viant, S. P.


Duncan, C.
Maxton, James
Wallhead, Richard C.


Edwards. C. (Monmouth, Bedwellty)
Montague, Frederick
Ward, Lt.-Col. A. L. (Kingston-on-Hull)


Elliot, Major Walter E.
Morrison, R. C. (Tottenham, N.)
Warrender, Sir Victor


Fanshawe, Captain G. D,
Naylor, T. E.
Watts-Morgan, Lt.-Col. D. (Rhondda)


Foster, Sir Harry S.
Newman, sir R. H. s. D. L. (Exeter)
Wedgwood. Rt. Hon. Joslah


Gates, Percy
Oakley, T.
Wellock, Wilfred


Gibbins, Joseph
Oliver, George Harold
Wheatley, Rt. Hon. J.


Gillett, George M.
Palin, John Henry
Whiteley, W.


Gilmour, Lt.-Col. Rt. Hon. Sir John
Paling, W.
Wilson, R. J. (Jarrow)


Gosling, Harry
Parkinson, John Allen (Wigan)
Windsor, Walter


Graham, Rt. Hon. Wm. (Edin., Cent.)
Penny, Frederick George
Womersley, W. J.


Greenall, T.
Perkins. Colonel E. K.
Wright, W.


Greenwood, A. (Nelson and Colne)
Pethick-Lawrence, F. W.
Yerburgh, Major Robert D. T.


Grenfell, D. R. (Glamorgan)
Peto, Sir Basil E. (Devon, Barnstaple)
Young Robert (Lancaster, Newton)


Groves, T.
Ponsonby, Arthur



Grundy, T. W.
Potts, John S.
TELLERS FOR THE AYES.—


Hall, F. (York, W. R., Normanton)
Purcell, A. A.
Dr. Salter and Mr. B. Smith.


Hall, G. H. (Merthyr Tydvil)
Raine, Sir Walter



NOES.


Acland-Troyte, Lieut.-Colonel
Dean, Arthur Wellesley
Hopkins, J. W. W.


Applin, Colonel R. V. K.
Drewe, C.
Hore-Betisha, Leslie


Balfour, George (Hampstead)
Edwards, J. Hugh (Accrington)
Hutchison, Sir Robert (Montrose)


Barnett, Major Sir Richard
England, Colonel A,
Inskip, Sir Thomas Walker H.


Bentinck, Lord Henry Cavendish-
Evans, Capt. Ernest (Welsh Univer.)
Little, Dr. E. Graham


Berry, Sir George
Everard, W. Lindsay
Looker, Herbert William


Bourne, Captain Robert Croft
Fenby, T. D.
Lynn, Sir Robert J.


Bowyer, Captain G. E W.
Forrest, W.
MacAndrew, Major Charles Glen


Briant, Frank
Foxcroft, Captain C. T.
Macdonald, Sir Murdoch (Inverness)


Brown, Ernest (Leith)
Gaibraith, J. F. W.
McLean, Major A.


Buckingham, Sir H.
Garro-Jones, Captain G. M.
Makins, Brigadier-General E.


Bull, Rt. Hon. Sir William James
Greene, W. P. Crawford
Marriott, Sir J. A. R.


Christie, J. A.
Griffith, F. Kingsley
Mitchell, w. Foot (Saffron Walden)


Cobb, Sir Cyril
Hannon, Patrick Joseph Henry
Morris, R. H.


Cowan, D. M. (Scottish Universities)
Harland, A.
Neville, Sir Reginald J.


Crawfurd, H. E.
Harris, Percy A.
Peto, G. (Somerset, Frome)


Crooke, J. Smedlay (Deritend)
Hartington, Marquess of
Power, Sir John Cecil


Curzon, Captain Viscount
Haslam, Henry C.
Preston, William


Dalkeith, Earl of
Hills, Major John Waller
Price, Major C. W. M.


Davies, Dr. Vernon
Holbrook, Sir Arthur Richard
Rawson, Sir Cooper


Rees, Sir Beddoe
Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)
Thomas, Sir Robert John (Anglesey)


Reid, D. D. (County Down)
Sheffield, Sir Berkeley
Tomlinson, R. P.


Rentoul, G. S.
Shepperson, E. W.
Watts, Dr. T.


Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Sinclair, Major Sir A. (Caithness)
Williams, A. M. (Cornwall, Northern)


Ruggles-Brise, Lieut.-Colonel E. A.
Smithers, Waldron
Williams, C. P. (Denbigh, Wrexham)


Russell, Alexander West (Tynemouth)
Somerville, A. A. (Windsor)
Wilson, Sir C. H. (Leeds, Central)


Rye, F. G.
Steel, Major Samuel Strang
Wilson, R. R. (Stafford, Lichfield)


Salmon, Major I.
Strauss, E. A.



Sandeman, N. Stewart
Sugden, Sir Wilfrid
TELLERS FOR THE NOES.—


Shaw, R. G. (Yorks, W. R., Sowerby)
Tasker, R Inigo.
Sir Robert Hamilton and Sir Martin Conway.


Bill read a Second time, and committed.

CURRENCY AND BANK NOTES BILL.

Postponed Proceeding resumed on Amendment to Question, "That the Bill be now read a Second time."

Question again proposed, "That the words proposed to be left out stand part of the Question."

Mr. GILLETT: When the Debate was interrupted, I was referring to the question of the desirability of using bills of exchange as cover for further note issues. I would like on this point to draw attention to Clause 1, which refers to the securities that are to be lodged as cover against the fiduciary issue. I understand that the Financial Secretary to the Treasury, in answer to a question as to whether bills of exchange were to be allowed to form part of the security placed as cover, answered in the affirmative. I had hoped that when he introduced this Bill he would have had something further to say as to the class of securities that are to be placed as cover. On inquiry I find that no list is published of the securities which have in the past been placed as cover against these notes. The special point to which I wish to draw attention is my suggestion that if the Government were willing to consider the extension of the fiduciary issue beyond £260,000,000 instead of limiting the extension simply to permission being granted by the Treasury, there might be permission given for an additional intermediate sum of, say, £10,000,000 or £15,000,000, which might be issued by the Bank of England without consultation with the Treasury, provided that the issue was covered by bills of exchange. A bill of exchange seems to me peculiarly suited for cover of this kind. In the first place, it is an indication of an increase of trade if the bills are increasing in numbers. In the second place, the bill of exchange being limited
to 90 days, it has to come up for reconsideration in a very short time. Hon. Members who are acquainted with the American system will remember that this is virtually a part of their plan.
There is another suggestion which I would like to make, and I should be glad to learn whether anything of this kind is being done by the Bank of England at the present time. In certain of the State banks on the Continent—it was started, I believe, in connection with the new Austrian bank which was inaugurated under the control of the League of Nations, and the same system is found in the new German bank which was started at the time when the Dawes plan was agreed to by the different nations concerned—part of the cover in their cases, I think, counts as part of the gold cover, is a holding in foreign bills and currencies. Even the Bank of Italy, which hon. Members opposite may consider worth consideration, in view of its political complexion, which is looked upon with favour by hon. Members opposite, hold a certain amount of their cover in foreign treasury notes. Therefore, the principle has some very important examples.
Why should not part of the cover of our note issue be held, say, in American currency and American bills? The Bank of Holland holds about £20,000,000 or £30,000,000 in currency or bills on New York or London. By this means they are able to regulate demands for gold upon their institution, and without having to go to any extreme measures, such as the raising of the bank rate, through having control of a certain amount of currency in one of the other countries, the exchange can be controlled. I am prepared to hear that the Bank of England are doing something of this sort at the present time. At the close of the War something like £50,000,000 to £60,000,000 in possession of this country was held in the United States, and I believe that at the present time a sum of some £30,000,000 is still kept on that side and is used in
connection with the payment of our debt to America. Therefore, what I am asking for may be, to a certain extent, already part of the practice of the Bank of England. I should like to know a little more on that subject from the Government. Before we vote on the Second Reading we might be provided with full information on the whole question of what cover is to be placed in connection with the note issue.
What will be the cost of the proposed change? Hon. Members opposite are always claiming that if things are put into the hands of private enterprise they will be done cheaper than if they are under Government control; but we have not been told anything as to the estimated cost of the change and what is to be paid to the Bank of England for taking control of these notes. I understand that at the present time the cost is about £350,000 a year. May I take it from the Financial Secretary that he expects that the cost of the whole proceeding will come to about the same amount as at present? As far as the Bill is concerned, power is given to the Treasury to make the arrangement, but I think we should be told whether we are going to incur any extra expense or whether the claim that private enterprise means cheaper work is really sound and that we can expect to do this on better terms than before. In conclusion, let me again lay stress upon the question of deflation. Personally, I am disappointed at the explanation which we have received from the Treasury Bench. It has not enlightened us to any great extent, except in the one case of the right hon. Gentleman who evidently looks upon any increase above £260,000,000 as something resembling a crisis in our national affairs. It is on these grounds, and because of the many interesting changes that have taken place in the banking world, the way in which other countries are dealing with their Note problem, the problem of the gold standard and its importance to our trade to-day, that I think no mistake should be made.
It is all very well for the Government to claim that the financial policy of this country is successful, but there are still one million unemployed people. Those who support the financial policy of the Government may argue that it has nothing to do with unemployment, but
year after year we are told that we are going to have better times. At the end of the year trade is no better, and the good times have not arrived. The financial system of the country may be sound but there is something lacking in our social system otherwise we should see better trade conditions. The financial policy of France has been open to criticism, but there are not so many men walking the streets unemployed as there are in England. These things have to be answered, and it is all very well to say that the financial policy is perfect. We want something which is going to provide work for the unemployed and help our great industries. I feel that the Government have entirely misunderstood the Amendment, and do not fully appreciate the way in which we look upon the problem. For these reasons, I support the Amendment.

Sir FRANK NELSON: I rise to support in a very few words this very desirable Measure. For some considerable time I have felt that, although I yield to no one in my admiration for the Bank of Englnd and the Governor of the Bank of England, there are certain comparatively recent developments in the trade of this country and in the banking system of this country which might make it desirable that the whole question of the control of the Bank of England over the money market and the difficulties in connection therewith should be gone into. Without in any way casting any shadow of reproach upon this great institution or upon the head of it, to both of whom so many well deserved tributes have to-day been paid, I think there are grounds for an investigation of the influence of the Bank of England in its main duty, which is to control credit, or to control the money market of this country. Some days ago I asked the Chancellor of the Exchequer whether he could tell me whether mercantile bills would be held as part of the fiduciary reserve, and in a supplementary question I asked whether the House was correct in assuming that the securities to be held in the fiduciary reserve would be securities not necessarily Government securities but any securities in the discretion of the Bank of England, subject to the control of the Treasury? The Financial Secretary in reply said that it was not a matter with which he could deal by
means of question and answer—a reply with which I entirely agree. I have been fortunate enough in catching your eye, Mr. Speaker, this evening, and, therefore, I hope someone on the Treasury Bench will deal with this question.
If the House will absolve me from any desire to be pedantic I should like to go into the whole question of the Bill market; the discount market of England. If I enunciate what are mere platitudes to some hon. Members, I hope I shall be forgiven, because it is necessary in order to state the case fully. Mercantile bills are the backbone of the London discount market, and only by means of a steady supply of commercial bills for discount can the true indication of our financial needs in order to finance the overseas trade of the country be gauged, thus enabling the Bank of England to exercise its function of controlling the money market of this country. Hon. Members will agree that the discount market offers this country large credit reserves, fluctuating with legitimate trade requirements. During recent times, these functions have been rather abrogated by the Bank of England of necessity, largely owing to the influence of a weekly allotment of Treasury Bills and a scarcity of commercial paper. Mercantile bills of a discountable nature are the only true indication of the finances necessary to handle our overseas trade.
I now come to what the last speaker, with whom in substance I agree, rather lost sight of, and that is that even supposing we were fortunate enough to elicit from the Treasury Bench a promise that mercantile bills are to be included in the fiduciary reserve, the fact remains that there are very few mercantile bills at present in the market. During the last eight or nine years the supply of trade bills, of ordinary mercantile bills of exchange, have been decreasing and decreasing. The reasons for this I can give in a few sentences. In pre-War times the overseas trade of this country was financed by overseas banks, or exchange banks, by means of their organisations built up over several generations; financed by means of the capital laid down in the various places in which they operated overseas. In recent years that method has been superseded by the big joint stock banks of Great Britain, who
very largely, and quite legitimately, have superseded the old method of financing overseas trade by means of bills of exchange, by means of financing merchandise and crops in transit by advances or overdrafts in London. That is a perfectly legitimate trade transaction upon which I have no criticism to offer.
In principle the two transactions are practically the same, but there is this difference. The overseas banks in the old pre-War days financed our overseas trade by means of overseas capital, whereas under the new method which is now springing up this overseas trade is now financed by the joint stock banks with the deposits of the British people in British banks in this country. Again, that is a perfectly legitimate transaction which I do not criticise at all, but it raises many considerations. I have already referred to one. Another consideration is that the funds employed by London banks in financing overseas trade might perhaps be better employed nearer home. Another consideration is the great expense and the years and years of building up the organisation of overseas banks, and the fear that this trade of theirs may be cut into. But that is, after all, a domestic consideration and in no way pertinent to this Debate.
Here I would ask the special attention of the Treasury Bench. These are the two points which have mainly led me to raise this very complex question to-night. The incursion of the home banks has a very much deeper effect than any so far indicated. It has meant the supersession in recent years of what is known technically as issues of confirmed acceptance credits. If there are any hon. Members who are, like myself, old bankers, and who know the discount markets, they will know that these confirmed acceptance credits were a system admirably adapted for creating credit, whilst at the same time they had another very admirable effect, and that was avoiding an increase in the percentage of banking advances in this country, which has occasionally given rise to very grave criticism from responsible quarters. Another very grave consideration is that any financial policy destructive of the predominance of the London bill market cannot be too strongly deprecated for this reason: The growing practice of financing overseas trade by advances in London must necessarily cause sterling bills to lose
ground as instruments of international credit, and the gold dollar bill of New York to assume a relatively more representative character. I frankly confess that that argument weighs more with me than any of the others. If we are to have the gold dollar bill superseding the sterling bill as the primary international instrument of credit, it is a matter that cannot be faced lightly by the Treasury Bench, and I am sure that the Treasury will give their close attention to the subject. Of course, it must be admitted that the Bank of England, by supporting discount rates near a parity with its Bank rate, encourages merchants and traders to accept advances on London in preference to the old method of financing their overseas trade by bills of exchange. That is perfectly natural. It is purely a question of financing in the cheapest manner available.
10.0 p.m.
I have already tried to point out that without a dominating supply of trade bills in the open market the true rate of discount based on demand for commercial credit cannot be achieved. I have raised this question because I think it requires ventilation. I have searched all the Debates in recent years, and I have yet to find that this subject, which has become increasingly serious as the years go on, has yet been ventilated in the House of Commons. I have also raised it in the hope of inducing from the Treasury Bench a sympathetic acknowledgment that they realise its importance and its future significance. I am not without hope that the definite inclusion of mercantile bills in the fiduciary reserve may possibly repopularise this method of overseas finance. I am sanguine enough to hope that a benevolent expression of sympathy by the Government will go far to achieve this very desirable object. One of the hon. Members for the City of London lamented, as I do, that a greater interest is not taken in currency matters. I read somewhere in one of our monthly periodicals that there seemed to be a belief growing up in the minds of the people that currency and exchange and monetary matters were subjects that were understood only by certain permanent officials, by City editors of one or two papers, and by, perhaps, Professor J. M. Keynes. That may or may not be the case. I think the Debate has shown that
a great number of Members, who may not speak with great authority, are certainly taking an attentive interest in this great subject. I regard this Bill as the outward and visible sign that, in the opinion of those best qualified to judge, this country has at last regained a measure of normality in its financial conditions, or, at any rate, to a sufficient extent to make the passing of this Bill desirable and necessary, and, personally, I shall have great pleasure in supporting it.

Mr. WALLHEAD: I shall speak with less authority rather than more, and, whether I speak with authority or not, I take an interest in this question of finance and currency, which I regard as a very important matter. I rise at the end of a long list of speakers who have spoken more or less as authorities. In speaking amongst that distinguished company, if I dare to intrude myself, my excuse might be found in a conversation that I had with an eminent Member of this House a day or two ago. He told me that when he first came to the House he went to see an ancient gentleman who was reputed to be a very great authority upon finance and currency. That gentleman said to my informant, "What line do you propose to take in politics? If you propose taking up finance, there are only two people who understand it. One of them is Mr. Gladstone, the Chancellor of the Exchequer, and the other is myself. I am getting too old to discuss it, and he has not the time." If there were only two people who then understood finance, there are very few people who understand it now. That has been indicated this afternoon already. If it is declared that I speak with some folly, I must be speaking in a company in which there is also folly.
I listened with interest to the speech of the right hon. Member for Norwich (Sir H. Young). He speaks on this matter with as much authority as anyone in this House, and, I am bound to say, with a great deal more charm than most. But I could not quite understand one or two points that he made. He told us that always in finance, when it came to a crisis, the individual wanted good, red gold. The time he was speaking of was 1914. But it occurred to me that in 1914, if the individual did want good, red gold, he did not get it; that is the very thing
he was most likely to be short of. What he did get was paper, and plenty of it, and the gold suddenly disappeared. Nothing that could be done by the banks could stand the tide of disaster that seemed to be overwhelming them in that crisis, until the State stepped in and took the responsibility, first, by declaring a moratorium, and, secondly, by issuing a State currency. It seemed to me on that occasion that the Government proved that the theory upon which our finance had been based up to then was unsound. We always understood that paper was based on gold and that you could not have paper money unless there was gold behind it; but in August, 1914, there was plenty of paper with no gold behind it and, as far as I could discover, very little real property. The State in this country has power to tax and to take, but it does not own property and it seems to me that in August, 1914, the rock upon which all our finance was based was the fact that the working people were going to work more and make more. That was what really mattered, and it was upon that fact that our credit rested.
I fail to understand all this talk about gold. In the Middle Ages, alchemists tried to transmute metals. We are told to-day that we must have whatever gold we can get hold of and that the bank must hold a reserve. We are told that without gold there is nothing on which we can base our trade. Supposing the idea of the alchemists were revived and that by some strange freak of nature all the gold in the Bank of England were transmuted into a baser metal. Supposing to-night all the gold in the Bank of England by some waft of air were turned into lead, what would happen? It appears to me that nothing would happen, unless the fact became known and caused a panic. But if it were kept quiet, things would go on just as if the gold were still there instead of lead. The whole thing rests on confidence. Very few of us know how much gold there is in the Bank of England. There may be sacks of sand in the vaults instead of sacks of gold, but because the gold is supposed to be there it supports our credit. It is a trick of bankers and financiers, and that is one of the reasons why I oppose the Bill.
I cannot talk about the subject in the same way as bankers do, but I can talk about it in another way which the bankers do not like. The bankers do not like to discuss their failure to stop the poverty of the working class upon whom their prosperity rests. I have heard something about Peel's Measure of 1844, whereby the Bank of England and the financiers gained control. They have had control during a time when there has been a more rapid increase in scientific knowledge and power than there has ever been before in the history of mankind. What is the state of the country and the world to-day, with all this power and control and all this knowledge of finance and currency? There are people in this country wanting bread. We are told that we are barred out in the discussion of these matters because of some fancy theory of political economy, which tells us that everything rests upon the law of supply and demand. I believe that this Bill represents the crowning brick on the edifice which the Government began in 1920 with their deflation policy. It is a pretty big brick, but to my mind quite useless. You may pass this Bill, and you may give this power to the Bank of England, but in 12 months' time you will still be explaining to us that if we only wait for another two or three months unemployment will begin to disappear. You have been saying so every year for the last ten years, and you will go on saying so for the next ten years.
In 1920 the policy of deflation was inaugurated and Mr. Bonar Law admitted from that Box that it brought unemployment in its train. It put millions of pounds into the pockets of the rentier class and authorities declared that the policy had practically doubled the National Debt and the interest which the usurers took. We guaranteed to pay back 20 shillings for every nine shillings we borrowed. We are told, of course, that the policy is working out now and that a drop in prices is taking place. We are told that the drop in prices has put £100,000,000 of value into the pockets of the working class, but let us remember, at the same time, that it has put £35,000,000 into the pockets of the rentier class who benefit by every drop in prices. The next step in this Rake's Progress was the restoration of the gold standard, and, again, the rentier class benefited. The Chancellor of the Exchequer himself
admitted that it might cause some disturbance as far as unemployment was concerned, though he said the disadvantages would be more than counterbalanced by the advantages which we would obtain.
I believe that the restoration of the gold standard in 1925 struck a fatal blow at the mining industry. From it came the disaster of 1926. That again was the result of the private control of our currency system and Mr. J. M. Keynes declared he could not understand how we had ever been so silly as to play that game. These obscure methods of working with the money lords, hidden as they are, have brought sorrow and anguish into the homes of millions of our people. Now we are going on again with the same fatal policy. City editors and financiers tell us that all the losses which industry has suffered are as nothing compared with the inestimable value of the retention of our prestige in international finance and our position as the financial centre of the world. If that is what the country exists for, all we need is a very small space in which the people can live who are carrying on financial business, with a few others to act as chauffeurs and domestic servants, and the rest of us can clear out. Probably, if that happened those gentlemen would have to begin to do something for themselves. This placing of the control of currency in the hands of private persons is a menace to the community.
We have heard a great deal about the Bank of England. I do not know whether the Government ever act without taking consultation with these eminent gentlemen who are directors of the Bank of England, but I know that the Government have made some pretty bad bargains, even according to their own supporters. The present Prime Minister went to America in 1923 and made a bargain, and I have heard no one on his own side commend him for what he did; there have been more complaints that he made a very bad bargain indeed. He made a bargain under which we are now going to pay a certain debt seven and a half times over before it is paid back. I do not know who were the financial advisers of that bargain, but, at any rate, there has been a good deal of condemnation of it ever since. Then there was the question of the restoration of the gold standard. Who were the
advisers who advised the Chancellor of the Exchequer at that time? It was said that American finance was going to keep the whole thing steady until we got our currency on to a firm basis, and for that we paid them 1,125,000 dollars. It has never been required, but American, bankers have put it into their pockets. If that is the best the experts can do, unwisdom can go a little further. It seems to me that there is too much collusion between London and New York, between New York and Berlin, and between Berlin and Paris, running round this never-ending circle—financiers who have got the world in pawn, holding everything and all peoples to ransom. There is as much to be said for smashing that, at any rate, as there is on the other side. The late Hon. Thomas E. Watson, United States Senator, said:
Always, everywhere, the money-changer is the same. If he wants a panic, he will have one. If he wants prices to fall, he contracts circulation and credit. He wants a currency he can limit, control, expand at his leisure, contract at his behest, thus ruling values with a rod of iron. Call him what you will, Jew or Gentile, he is the identical creature that defiles the temple, trades on the misery of his country, puts greed above the promptings of patriotism or humanity. Christ scourged him from the temple, and Abraham Lincoln said he ought to have his infernal head shot off.
In that, I think Abraham Lincoln was perfectly right, as he was in many other things that he said. We here have made pleadings after pleadings and have brought before this House the condition of the people time and time again. I am representing a constituency in which 81 per cent. of the available men are unemployed. They want to know what your juggling with currency will do for them. Will it bring them work, or bread, or give them anything that is of any value at all? Juggle with these things as you will; all your talk of what you are going to do with these marvellous manœuvrings leaves them cold. It is time that we took control of currency ourselves. It is time that the State controlled it. I am less afraid of the State than I am of private enterprise in matters of currency. I have seen the private manipulators of money for the last 100 years manipulating the currency—[Laughter.] I mean that I have watched them through historical pages, and I have watched them myself for the last 10 or 15 years.
I have seen the financiers pile up debt in this country and bring about wastage. During the four years of the War what were we doing? We were wasting the wealth that perisheth and all that we have left is a debt that endures; and it will endure, just as the debt on Waterloo has endured. With all your finance and your policy, you have not paid for Waterloo yet. You cannot get out of debt; the money-changers will not let you. The world is in pawn to them, and the one thing that will bring about the smashing of your entire system, by a physical overthrow which will be thoroughly well justified, is the fact that people are in poverty and misery, while wealth abounds on every hand. I stand for smashing that if I possibly can. I probably represent the opinion of very few in this House, and my point of view may be put in a blundering way, but I believe it sincerely, and I believe that unless this country breaks the power that the financier exercises over the life of the nation, sooner or later chaos will ensue and civilisation come down smashing and in despair.

Mr. HAMMERSLEY: I have listened to every speech in this Debate, and the House is to be congratulated that, in a matter of this importance, the issues should have been debated, with the single exception of the speech to which we have just listened, on absolutely non-party lines, and that the Bill should have been debated entirely on its merits. There may have been divergent views expressed as to the proper financial policy which this country in the future ought to pursue, but, in respect of the main purpose, namely, the proposal that the currency, the Treasury Note issue, and the Bank of England Note issue, should be amalgamated, there has been little, if any, difference of opinion. Obviously, the present position with respect to the issue of currency is unsatisfactory. It is a fact that any amount of Treasury Notes can be issued. There is no control of the amount. In the present position of the law, it is quite possible for the Chancellor of the Exchequer in his capacity of Chief of the Treasury, without coming down to this House, to direct the issue of currency unspecified in amount, and if necessary, to state that it shall be used for some particular purpose, though his
conduct may result in his losing his job. This House would have no control over the fact that he had issued this amount of currency. It is true that the Treasury Minute of 1919 laid down a specific rule of guidance whereby the actual maximum of one year should be the permissible maximum of the succeeding year, but that is a Treasury Minute that can be cancelled, even without the knowledge of this House. In the circumstances, it is obviously proper that our existing position respecting the issue of currency should be put in order.
The policy of the Government, as explained by the Secretary of State for War, was to carry out as far as possible the resolutions of the Genoa Conference. The second of those resolutions was that banks of issue should be free from political pressure, and that where there was no central bank of issue one should be established. When this resolution was passed it was impossible to pass over from the Treasury to the Bank of England the issue of currency notes, because if we had done so we should have had no controlling principle. But when the Gold Standard Act of 1925 was passed Parliament laid down controlling principles for the issue of currency. It laid down the most important principle that the currency should be transferable into gold for export. That having been done, and this gold standard having now been in existence over two years, I think the House can safely say, realising the existence of this guiding principle laid down by Parliament, that the control of the Treasury issue should pass out of political hands into the hands of an independent, impartial, proved financial corporation—the Bank of England. I do not want to labour that point any longer, because I believe there is almost complete unanimity upon it in all sections of the House, but there is not the same unanimity in respect to the pendent proposals. The proposal in respect to the fiduciary issue, and the limit which is placed on the fiduciary issue, is the subject of criticism under two heads—firstly, in respect to its amount; and secondly, in respect to the mechanism whereby it can be varied.
In considering the amount—£260,000,000—at which the fiduciary issue is stabilised, I speak as a person engaged in an industry in which four-fifths of the trade
is export trade. Naturally, in examining this problem, I bear in mind the position of the export trade. One thing the export trade do not want is to see any further measure of deflation. The Financial Secretary explained to us in his very clear and lucid speech the reasons whereby this figure of £260,000,000 had been arrived at. He showed that the maximum figure under the existing situation would be something like £264,500,000. In view of the fact that this year the Irish Free State are to produce their own currency, we have to subtract from that figure £5,000,000 or £6,000,000. Therefore, the maximum fiduciary issue at the present time, if the Bill were not passed, would be something like £258,500,000. In fixing the figure of £260,000,000, the Government have rounded off that figure on the upward grade, and I personally, having in mind the export, trade, am satisfied that in choosing that figure they have taken a wise and a proper figure. But I am not quite so satisfied with the method whereby the fiduciary issue figure can be varied. The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) seemed to be under a misapprehension in respect to the meaning of Clause 8, the Clause which lays down the rules whereby the fiduciary amount can be increased. He was under the impression that an increase in the fiduciary issue would have to be backed by gold or something tantamount to gold. If I may read from the Bill itself, I think I can show that in Clause 2 it is quite clearly laid down what is understood by the fiduciary issue. It is that part which is not made up by gold or Bank of England notes Clause 2 provides that:
Subject to the provisions of this Act the Bank shall issue bank notes up to the amount representing the gold coin and gold bullion for the time being in the issue department, and shall in addition issue bank notes to the amount of two hundred and sixty million pounds in excess of the amount first mentioned in this Section, and the issue of notes which the Bank are by or under this Act required or authorised to make in excess of the said first mentioned amount is in this Act referred to as the fiduciary note issue.'
That clearly lays down what is meant, and it is understood that when the fiduciary issue is in excess of £260,000,000 it will not be required to be made up by gold. The point about which I have some misgivings is the mechanism
whereby the increase in the fiduciary issue may be brought about. It must originate in the Bank of England, and I am not quite satisfied that the Bank of England takes the necessary steps to increase the fiduciary issue sufficiently quickly. If the people who hold the scales are to be the people interested in one side of the balance, I am not sure that we should not consider some alteration in the constitution of the court of the Bank of England. The fact that Sir Josiah Stamp has been put on the court of the board of directors is an act which is considered of some value by the commercial community. I am satisfied that this Bill is a very good one. It proposes to set a standard of legality upon the existing machinery, and it will remove the last trace of the War influence from the financial policy of the nation.

Mr. DALTON: I rise to support the Amendment which has been moved by my right hon. Friend the Member for Colne Valley (Mr. Snowden). That Amendment demands three things, delay, inquiry, and international co-operation. I should have thought, after the nonparty character of the speech delivered by my right hon. Friend in moving his Amendment, the Government might have approached this subject in a somewhat less partisan atmosphere. Instead of doing that, the Secretary of State for War spent the greater part of his speech endeavouring to make cheap debating points by political quotations from the literature issued by various parties. Therefore, the Secretary of State for War has put us into the position in which we may have to approach this subject in a party spirit.
This Measure has had a very poor Press as compared with the support which the Chancellor of the Exchequer received when he proposed that this country should return to the gold standard. Today, this Bill is receiving much less approval than was given to the previous Measure, and a number of those who were behind the Chancellor of the Exchequer when he proposed a return to the gold standard are not supporting this Measure to-day. I notice that, of the speeches made by supporters of the Government, very few are wholeheartedly in favour of the Bill. One of the few hon. Members who has wholeheartedly supported the Bill is the hon.
Member for the City of London (Mr. E. Grenfell), who wished it to be passed without Amendment and without discussion. That is the true Bank of England and City of London attitude. They consider that secrecy in these matters, in which they believe themselves to be so expert, is the only possible screen against public loss of confidence. We take a different view, and prefer public inquiry into these matters which are now in dispute.
The delay for which we have put forward our case is not delay for its own sake, but delay in order to permit of an inquiry. This Bill is not an urgent Bill, though it is a very important Bill, and may have very important effects. It would be quite possible to go on as we are for another six months without any serious damage arising. As a matter of fact, the Cunliffe Committee themselves—and they are quoted as though their remarks were Scripture by spokesmen of the Government—said:
Assuming that a return to gold has been made, the precise date of the amalgamation of the note issues loses most of its importance.
I believe that that is certainly true. On the other hand, in the judgment of many of us, this Bill threatens, if passed in its present form, to do great harm to British credit in the future, to prevent or lessen or check trade revival, and to prevent the re-employment of large numbers who are now unemployed.
The case for an inquiry is that no inquiry has really taken place since the Armistice. The Cunliffe Report was published, strange though it may seem at this distance of time, in August, 1918, since which 10 very remarkable years of experience have accumulated, and the rather jejune remarks which have been quoted to-night from the Report on the subject of the Bank of England and its constitution and powers are really no sort of contribution at all to an inquiry which ought to be carried out after all that has happened in the years since then. Indeed, the demand for an inquiry which we are making is supported, not only by the Labour party in this House, but by a great number of other people who ought to command some measure of respect from the Government. It is supported, not only by the Labour party, not only by the trade union spokesmen of the General
Council, but also by the industrialists who are meeting in what is sometimes known as the Mond-Turner Conference. Indeed, earlier this evening the right hon. Gentleman the Member for Carmarthen (Sir A. Mond) was present, and actually rose to speak, but the Secretary of State for War—I do not know whether he knew that his right hon. Friend wished to speak—rising from the Front Bench, prevented the right hon. Gentleman the Member for Carmarthen from being called. The right hon. Gentleman has now, I am sure to the general regret, left the House, and he will not, therefore, be able to defend in this House the Memorandum which he jointly signed with Mr. Ben Turner.
That Memorandum is worth referring to at this stage, since neither of its authors are here to refer to it. The concluding recommendation of the Memorandum is:
That it is essential to hold a full inquiry into the best form of credit policy for this country before decisive steps are taken by the Government.
It is a curious thing that, while spokesmen on the Government side have for a long time been urging Capital and Labour to get together and co-operate in defence of their common interests, yet when this conference has actually met and has produced this very important Memorandum on currency policy, the Government pay so little regard to it. When, on the other hand, the official Opposition having put down an Amendment exactly in line with the recommendations of the Conference, none of the industrialists who supported it outside has the courage or the leisure to come and say a word in its support, it is not very encouraging for future essays in co-operation between the representatives of Capital and Labour. Further, our demand for an inquiry is supported by a newspaper which is apparently thought well of by the Secretary of State for War, namely, the "Banker." In December, 1927, the "Banker" stated in its editorial comment:
It is almost inconceivable that Mr. Churchill will proceed with such a step"—
that is, the amalgamation of the note issues—
without some further investigation of the position";
and the "Banker" proceeds, in the same issue, to develop the case for a full inquiry, such as we are demanding,
before the financial system in this country is definitely pegged and limited in the way proposed by this Bill.
Finally, on the demand for inquiry, the right hon. Gentleman the Member for Norwich (Sir H. Young), although he made a speech in general support of the Bill, yet also supported the holding of an inquiry, but only after the Bill has been passed, which in our view would deprive the inquiry of much of its value. The points on which we maintain an inquiry should be held are, first of all, the general question of the credit policy that should be pursued, and, secondly, the question of our gold holding. The bankers of the City of London, like the Jews of old, dance round an image of the golden calf. I have been renewing my recollection of the Scriptures by reading the thirty-second chapter of Exodus, and I find they are there described as a stiff-necked people who were led in their idolatrous movement by Aaron, in the temporary absence of Moses, who subsequently exacted retribution. Aaron, I conceive, must be the Chancellor of the Exchequer, who is already suffering from a certain retribution, but I hope he will soon be back in the House. Without pursuing the parallel too far and without naming anyone for the rôle of Moses, it is evident that the fate that befell those people may yet befall the bankers and other dictators of our policy.
I pass from metaphor to fact. Little reference has yet been made by spokesmen on the Government side to the fact that no less than £160,000,000 of gold is being held to-day in the issue department of the Bank of England, earmarked against notes in the hands of the public, which the public may not, under the Act of 1925, exchange into gold coin. I should like some justification given for the continuance of that state of affairs. Historically, the gold holding in the issue department was a reserve against an internal drain of the currency. That internal drain has been blocked finally by the Act of 1925. The only possible drain on our gold reserve that can now occur is an external drain in connection with the state of the exchanges, and this can in no way be guarded against by this holding of £160,000,000 in the issue department, where it is deliberately immobilised, a mere bogey reserve against an internal paper issue into which it can-
not be converted. I ask the hon. Gentleman who is going to reply to give us some explanation of the continuance of this archaic, wasteful, and uneconomic condition of affairs, which is completely at variance with resolution 9 of the Genoa Conference, which the Secretary of State for War was at great pains to explain the Government were seeking to implement. The only result of holding this immense sum of gold in this perfectly useless manner will be that in the future we shall be setting a bad example internationally to every other central bank in every European and other country which wishes to join in the general scramble for gold, with the result of pulling down the world price level and spreading, not only in this country but also abroad, deflation, falling prices, trade depression, and unemployment.
Much criticism has been directed against this pivotal Clause 8 of the Bill. Much of it has come from the Government's own side of the House. We may perhaps leave further discussion on it to the Committee stage. It is evident that Clause 8 as at present drafted commands no kind of general support, and the contention that has been made seems to me absolutely justified that the effect of it will be to withhold from an expanding movement of trade the credit support it is entitled to receive unless we are to have political interference with the Bank at regular intervals of two years, because in reply to the speech of my right hon. Friend the Member for Colne Valley, the right hon. Gentleman said that if it should prove that the currency provided for under this Bill was insufficient for reviving trade, growing population and increasing production, the remedy would then be that Parliament would be asked at the end of two years to authorise a higher fiduciary issue than was permitted in Clause 8 in its initial form.

Sir L. WORTHINGTON-EVANS: At the request of the Bank of England.

Mr. DALTON: At the request of the Bank of England, the Treasury may, during a period of two years, authorise a higher fiduciary issue. The Secretary of State for War also said that if at the end of two years it seemed inexpedient to restrict the fiduciary issue to the original amount, Parliament would be invited to step in
and pass amending legislation. That is political interference, and we are, therefore, led to this conclusion, that the Government contemplate the possibility of political interference with the banking arrangements of this country at intervals of two years, provided that trade improves sufficiently to justify it. I would like a reply on that point when the hon. and gallant Gentleman comes to reply. The Bank of England has been much praised by some hon. Members. None the less, even some of those who have praised it have admitted that it is in need of some investigation, and the last speaker said he admitted that the constitution of the Court was not suitable to modern conditions.
My view, and that of many of my hon. Friends, is that we are not prepared to vote for the giving of any further powers and privileges to an unreformed and even to an uninvestigated Bank of England. That is our view. We believe that there are many things about the Bank of England, its constitution, powers and policy, which need not only to be investigated, but to be altered, and, in some cases, very considerably altered. Again, I do not propose to develop that at great length at this stage of the evening. The late Walter Leaf has already been quoted to the effect that the Bank of England was by no means the perfect institution it frequently imagined itself to be. As far as its directors are concerned, with one or two recent exceptions, they are recruited by a mere process of in-breeding and co-option within a very narrow circle within the City of London. I heartily associate myself with the suggestion made by my right hon. Friend the Member for Colne Valley, that it is quite intolerable that at this time of day on the governing body of this exceedingly important central bank there should be no representative of the trade union movement or of the co-operative movement, or of what I call the more modern forces and more modern ideas born in this country since the passing of the Bank Act in 1844, at which point the minds of many of the defenders of the present system appear to have stopped still. It does not seem possible for the Bank of England much longer to continue these idiosyncrasies without some drastic reorganisation, possibly followed by some
suitable modification in its present practices and powers, as indicated in our Amendment.
The question of international co-operation has been debated backwards and forwards in this House. The Secretary of State for War claims that the Government have carried out all the Resolutions agreed to at Genoa—many of them apparently drafted by himself, and many of them admirable in terms of drafting —except the ninth and last of them. All of them except the ninth, he tells us, have been carried out by the Government, and they will seek to carry out the ninth at the proper time. The ninth Resolution is that referring to the summoning of an international convention for the economising of gold and the stabilisation of its value by international agreement. The proper time for that form of international co-operation has not arrived, he says. If that be so, I submit that the proper time for passing this Bill has not yet arrived. The proper time for this Bill is after the summoning of this international conference, and not before, because this Bill will be dangerous to the future credit basis of the country if it is carried into law without some international agreement which will prevent the setting up of this competitive scramble for gold, the danger of which has been admitted even by the Secretary of State for War.
Our central position is this, that we are being asked, on a matter which may seem highly technical, and which may seem very remote from the lives of the majority of the dwellers in this country, to assent to a hurried decision which may turn out, if our fears are well grounded, to be fraught in future with very grave harm to the fate of millions of wage-earners and of millions of households up and down the land, which may, if our fears are well grounded, check the trade revival for which we hope, and prevent the re-absorption of our unemployed in productive work, and even spread from this country to other countries the miasma of trade depression and deflation and falling world prices and unemployment. We refuse to associate ourselves with the commission of what we believe to be a rash and an unnecessary act until there has been a prior investigation into the probable economic effects of what is being proposed in this Government Measure.

The UNDER-SECRETARY of STATE for SCOTLAND (Major Elliot): Although the speeches of the Financial Secretary and the Secretary of State for War cleared up conclusively many points, they have, nevertheless, been recapitulated by different speakers who came later in the Debate. Speaker after speaker has recapitulated the suggestion that there was something earth-shaking about this Bill, in spite of the very clear explanation of the Secretary of State for War that that was not so. Speaker after speaker, and particularly the last speaker, referred at length to the necessity for holding an inquiry into the general currency policy of this country as a reason for delaying the passing of this Bill. I think that was one of the main arguments that the hon. Gentleman made. There is not a word about that in the Amendment which is before the House. The hon. Member had not read his own Amendment before he started out to explain it to the House. The suggestion in the Amendment is that the House should not assent to the Bill
amending the law relating to currency and bank notes and transferring to the Bank of England the issue of currency notes in the absence of any policy for putting into operation the resolutions of the International Conference hold at Geneva in 1922.
There is no mention of an inquiry there. The Secretary of State for War, who, after all, was at Geneva, and had more to do with the drafting of the general resolutions and the discussions on them than even, with great deference, the right hon. Gentleman the ex-Chancellor of the Exchequer himself, has explained most clearly when he was asked what was the policy of the Government. No further Debate, therefore, need take place on that point. The Secretary of State for War explained what is the policy of the Government in respect of the Genoa resolutions, and the putting of the Genoa resolutions into force. There is no need for inquiry into the policy of the Government. What is asked for in the Amendment is an inquiry into the constitution and powers of the Bank of England— [HON MEMBERS: "And policy!"]—and policy of the Bank of England. That is not a matter which makes it necessary for us to delay the passage of this Bill. As to the necessity for an inquiry into the policy of the Bank of England, we have had the Bradbury Committee, which was appointed by the right hon. Gentle-
man opposite, a most authoritative Committee, which went into the matter at great length, and reported.
The position in regard to the Bill is perfectly simple. The Bill has been brought in to deal with the position which may arise in the event of a certain expansion of note issue being necessary, and it being appropriate to amalgamate the two note issues which at present exist. On the question of the amalgamation of the two note issues, no quarrel has arisen in the House. I think we are all at one on that matter. The further question relates to the body which is to exercise control, and the manner in which the control is to be exercised. Upon that question hon. and right hon. Gentlemen opposite have spoken at length. The situation has been completely dealt with in speeches from this side of the House, and I do not propose to make a further speech on the same lines. Before I ask the House to come td a decision, I will answer one or two questions which have been put to me.
The hon. Member for Peckham (Mr. Dalton) blamed the Secretary of State for War because of the party atmosphere which had been introduced into the Debate, and which had prejudiced him so much that the hon. Member said he felt absolved from any necessity to treat the matter in a non-party spirit, with which intention he had originally intended to approach the Debate. I have been looking at an article which was written recently by the hon. Member for Peckham, and it seems to me that his non-party attitude had broken down somewhat earlier than he would have us believe, and that his good resolution had broken down even before this Debate. In the article he refers to this Bill. He says:
industry will once more be butchered to make a banker's holiday.
He further said that there would be
Another human sacrifice on that inhuman altar of the golden calf which is worshipped in bank parlours.
11.0 p.m.
I can imagine the hon. Member for the City of London (Mr. E. Grenfell) carrying out human sacrifices in the bank parlours. Therefore, the hon. Member for Peckham did not approach the Bill and the speech of my right hon. Friend the Secretary of State for War with that complete and utter impartiality which he.
would have us agree is the proper atmosphere in which to approach the subject. I do not desire to follow him in these controversial questions. I do not feel competent to deal with the experts by whom I am faced on the other side of the House. I do not lay claim to any special knowledge on this subject. The hon. Member for Finsbury (Mr. Gillett)—

Mr. DALTON: Am I to have a reply to my question?

Major ELLIOT: The hon. Member need not be alarmed, because I refer to previous speakers before coming to him. He must not desire to monopolise the Debate. The hon. Member for Finsbury made a most reasoned and cautious speech, and he put a question which was afterwards taken up by the hon. Member for Stroud (Sir F. Nelson). He referred to the question as to what securities were to be held as cover for the note issue, whether it would be possible to hold Mercantile Bills as a cover for these notes. The hon. Member for Stroud made certain suggestions which I do not think it would be in order for me to refer to now. The question he raised was whether it is possible for bills to be held as cover for these notes, and the plain answer is, that it is possible. That deals with the specific question put by the hon. Member for Finsbury and the hon. Member for Stroud. The hon. Member for Peckham asked several questions to which I will do my best to reply. His first point with regard to the non-party attitude of the Secretary of State for War I have already dealt with. He then went on to ask why a full inquiry should not be held before the Bill was passed. There is no difficulty in replying to that question. A full inquiry has been held into general policy by the Cunliffe Committee and the Bradbury Committee; an inquiry into the constitution and powers of the Bank of England, and it is not necessary to delay the passage of this Bill in order to hold another inquiry. At any rate, an inquiry can be held just as easily after the passage of the Bill as before.
One inquiry has been held into general policy; an inquiry into particular policy is unnecessary. If an inquiry into general policy is desirable it can be held
after the Bill is passed. The hon. Member also asked whether we had been led away into worshipping the golden calf and he confessed that he had been reading the chapter in Genesis in order to refresh his memory. Perhaps he will allow us to refresh our memory in a similar manner in the Committee stage. Then he proclaimed that too great a store of gold was being held in this country. The two Committees to which I have referred did not report in that sense. Our stock of gold is comparatively small, and nobody can complain that we are gathering too great a stock of gold in the vaults of our banks. In fact, the suggestion that that is likely to lead to a sort of international scramble for gold is entirely unwarranted. The last question that the hon. Member put was as to Clause 8. He said that Clause 8 presupposes some kind of acute crisis before the expansion of the Note issue could take place. I wish only to reiterate what was said by the Secretary of State for War, who specifically stated that this was not to deal with questions of acute crisis, but was to deal with matters before a crisis had occurred, and that it became now part of the functioning mechanism of the money machine in this country.

Mr. GILLETT: The impression I got from the speech of the Secretary of State was entirely different from that I now gather from the speech of the hon. and gallant Gentleman. To me what the hon. and gallant Gentleman says is the exact opposite of what the right hon. Gentleman said.

Major ELLIOT: That shows that even the humblest Member of the House, such as myself, may be useful in repeating what has been said in the course of the Debate, and that these remarks of mine may have had the valuable effect of reassuring the mind of the hon. Member before he reads the report of the Debate in the OFFICIAL REPORT, because I am certain that in reading the OFFICIAL REPORT he will see that the impression which the Secretary of State intended to convey, and I believe did convey, was the same impression as I am now imperfectly intending to convey. The last point of the hon. Member was on the question of interference. He said that this presupposes repeated interference on the part of Parliament with the credit
machine of this country, and he adduced, in support of that view, the fact that if such expansion had been continued for a matter of two years at the request of the Bank of England, Parliament might pass legislation confirming the tentative decision which had been taken by the technical experts and by the Bank of England in consultation with the Treasury. It is suggested that that is a form of interference with the Bank of England.
Surely the granting of a request is the strangest form of political interference or compulsion that has ever been suggested in this House? The power can be exercised at the request of the Bank of England. It can be exercised to confirm the decision taken by the Bank of England, which has been in practice and tentative trial for a period of two years. If at the end of that time the Bank of England and the Treasury are consenting and bring forward a case, and make a case on the Floor of the House, no one can say that that is an attempt on the part of the House of Commons to interfere with the technical experts in the matter.
There is only one further point to be mentioned, and that is one of interest to Members for Scotland. It relates to the points which the Scottish Banks have raised by correspondence with the Secretary of State as to the Scottish Note issue. The Secretary of State is interviewing the representatives of the Scottish Banks to-morrow, and it would be obviously improper for me to deal with the question here now.

Mr. MAXTON: I have listened, as a humble learner all day to the various speeches on this subject. I have heard the Financial Secretary, the Secretary of State for War, the Under-Secretary of State for Scotland, and also the hon. Member who, I understand, speaks with some authority as representing the Bank of England. If there was no case at the beginning of the day for the Amendment, there is certainly a case at the end of the day for a full inquiry into the operations of the Bank of England. I suggest that hon. Members who represent the Government would do a great service to themselves and to the country if they, first, on their own behalf, and for their own benefit made some little inquiries into the operations of the Bank
of England. This, we are told, is the one institution that can be trusted with the central handling of our financial and credit operations; it is to handle the National Debt, the Bank Rate, the expansion or contraction of credit and look after the gold reserve. Why they do not hand over the Mint to it as well, I cannot understand. But what stands out obviously to me, not as an expert but as one who has been sent here, representing a constituency, to try to form a plain man's view of what the experts say, is that we are told that this institution was unfit to meet the special strain imposed on the country by the outbreak of war. That strain necessitated the Government taking all the responsibility for the issue of currency. The institution that is unfit to meet special stresses and strains, is unfit to shoulder the ordinary burdens. Since the War this institution has been incompetent to do the job with which the nation has entrusted it.
The hon. Member who spoke on its behalf asked if the Bank had ever abused its powers. There are several kinds of abuse. It would be wrong of us to suggest that the Bank has ever been guilty of financial dishonesty, but I make this charge against the Bank of England —that it has never run the currency of this country in such a way as to meet adequately the financial needs of the business community and particularly the working-class community. An institution which cannot perform the function for which it has been brought into being requires not merely to be inquired into, but to be abolished. The hon. Member who spoke on behalf of the Bank suggested that there was something irreligious, almost blasphemous in discussing the Bank of England and that it was an institution above reproach and above discussion. But it is only an ordinary business like any other business in this country, except that it has special privileges granted to it by the State. It uses its special privileges and powers to make profits like any other capitalist institution. Since the War, because it was incapable of doing the job it was set up to do, the Governments of the post-War period had to set up the Trade Facilities Act. The Government had to come in and do the banking business that the big national banks were unfit or unwilling to do. Millions of pounds were
advanced to various commercial enterprises because the Bank was not doing its job.
Since that time we have had the sugar beet subsidy. Surely, if there is one defence for private enterprise banking it is that this institution will advance money to encourage a new and somewhat risky enterprise to establish itself. But private enterprise banking, including the Bank of England, would not face up to the establishment of a new industry like the growing of sugar beet and the production of beet sugar, although the Government and the Government's advisers were all of opinion that both from an industrial and a national welfare standpoint this was an industry that should receive financial backing. This House had to vote out of the public purse moneys to support private enterprise, because private enterprise, which is supposed to do the job, would not take it on. I might mention also the position of the mining industry, which got right down into ruin. Private enterprise in mining ought to make its arrangements inside private enterprise in banking to get its financial support, but what did they do? They came running to this Government, that is now saying that the Bank of England must be trusted with all the Government's financial operations, and the Government handed them, again out of the public coffers, some £20,000,000 that the banks were afraid to advance to this derelict industry. Industrialists in the one department could not run the business efficiently, the financiers in the Bank of England would not advance them further credit, and they came to the Government and took money out of the pockets of the ratepayers, which means the rest of the working class to subsidise the mineowners of this country. [Interruption]. It is one great regret in my life that I have to use my position in this House to patch up the evils of capitalism in order that the workers may not suffer starvation.
The worst point against this proposal of the Government is the careless, slipshod way in which they come before us with new legislation, without taking the trouble to think out the basic principles or the necessities of the country. This is a trivial, footling way of meeting a great problem. Last week they came to
us and told us that private enterprise farming could not pay its way and that this industry must be specially financed, with long-term credits and short-term credits, that the ordinary banks were not prepared to risk at ordinary business rates; and again they come to this House of Commons, that must not interfere with financial operations, because they are too sacred, this House that must not dare to step into these places where the experts alone can tread. The hon. and gallant Member for Kelvingrove (Major Elliot) said that this is a field into which the layman should never enter; he may look over the fence and peer at the wise men inside, but he himself should never enter in. The position of the Government last week was this: The House of Commons must give to some new corporation—not the Bank of England, mark you, this well-established national institution, that has all the experience of financial manipulation and that is the only one that can be trusted with our bigger operations— power to finance farmers for long or short terms.
I am sometimes assumed to be a partisan, but, like my right hon. Friends on the Front Bench, I try to look at everything in a non-party way. Last week the Government view was that the ordinary banking institutions, with the Bank of England as their great central head and inspiration and guiding light, were unfit to cope with the problem of financing the derelict agricultural industry. I am quite sure, Mr. Speaker, that your recollection is the same as mine, that that was the issue last week. We had to create a great new financial corporation for the special purpose of financing the farming industry, a permanent basic industry. Hon. and right hon. Gentlemen opposite told us how the whole national life hung on the success of the agricultural industry, and that the great problem was to get the industrial workers back on to the land, so that we could produce our own food supplies and he independent of the hated foreigner.
That was the argument last week, when they said the Bank of England was not fitted to do it, and that a new financial corporation must be set up, and money paid out of the public coffers to keep it going. Now the Government tell us that
there is nobody but the Bank of England fit to look after the general finances of the country. What is banking for? To make dividends for the shareholders in the Bank of England? If banking has any legitimate purpose at all in our national life, it is to keep the wheels of industry going steadily and regularly, and to provide the people who are operating the wheels of industry with a decent living. Never once during the whole time since the House of Commons conferred that power on the Bank of England has that system been in operation in this country, except during a brief period during the War, when there was left in the hands of the Bank of England more power than at any other time in history. I am not a very enthusiastic supporter of the Amendment. I agree with the hon. and gallant Gentleman who has just sat down that there is no need for further inquiry. The job now is for the nation to take over the Bank of England, and to inquire afterwards. I do not for a moment think that there are not new ideas to be discovered in the manipulation of money. I do not believe that the last word has been said about credit expansion or credit contraction.
I do not believe that we have reached the last stage of development in international banking relations. A Government that was looking into the future with a statesmanlike point of view would realise that the importance of the Genoa Conference was not in the Resolutions, but in the interesting fact that they point quite definitely to the fact that the financing of the future has to be on an international scale, that the great expansion is to be an international one, that the currencies of the various countries are to be assimilated, and that the credit is to be a central one. In that

way you can stimulate world developments in a way that you cannot do with a small national system of banks. In the future there is going to be a great development of banking in the international field, but to-day hon. and right hon. Gentlemen, in introducing this Bill, have never looked at this problem either from the point of view of the advantage of the working class in this country, or from the point of view of the future progress of the world. They have looked at it as an opportunity for private enterprise to make more profits and more money. That is dishonest and not statesmanship. And then they talk in high tones and say that it would be terrible if we had political interference with the banking system, but does anyone believe there is not political influence now, or that every director of the Bank of England is not a Tory and a defender of Capitalism, and that his Tory philosophy does not operate in his ruling of the Bank's affairs. The dividends of the Bank and the enhanced value which the shares have in the market to-day would not be what they are if the guiding principle of the Governors of the Bank had been the national welfare rather than personal profit. Political considerations operate t -day, political considerations would, I hope, operate in the future, but I hope that in the future the political consideration that would operate would be the general welfare of the common people, who have had a rough time of it in this country, and not the assistance of the luxury of the very few in a specially catered for class.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 229; Noes, 101.

Division No. 123.]
AYES.
[11.26 p.m.


Acland-Troyte, Lieut.-Colonel
Bourne, Captain Robert Croft
Cazalet, Captain Victor A.


Alexander, E. E. (Leyton)
Bowater, Col. Sir T. Vansittart
Cecil, Rt. Hon. Sir Evelyn (Aston)


Alexander, Sir Wm. (Glasgow, Cent'l)
Bowyer, Captain G. E. W.
Chapman, Sir S.


Allen, J. Sandeman (L'pool, W. Derby)
Brass, Captain W.
Charteris, Brigadier-General J.


Amery, Rt. Hon. Leopold C. M. S
Bridgeman, Rt. Hon. William Clive
Christie, J. A.


Applin, Colonel R. V. K.
Briscoe, Richard George
Cobb, Sir Cyril


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Brocklebank, C. E. R.
Cochrane, Commander Hon. A. D.


Astbury, Lieut.-Commander F. W.
Brown, Col. D. C. (N'th'l'd., Hexham)
Conway, Sir W. Martin


Astor, Maj. Hn. John J. (Kent, Dover)
Brown,Brig.-Gen.H.C.(Berks, Newb'y)
Cooper, A. Duff


Baldwin, Rt. Hon. Stanley
Brown, Ernest (Leith)
Couper, J. B.


Barclay-Harvey, C. M.
Buchan, John
Courtauld, Major J. S.


Beamish, Rear-Admiral T. P. H.
Bullock, Captain M.
Cowan, D. M. (Scottish Universities)


Beckett, Sir Gervase (Leeds, N.)
Burgoyne, Lieut.-Colonel Sir Alan
Cowan, Sir Wm. Henry (Islington, N.)


Bentinck, Lord Henry Cavendish-
Burney, Lieut.-Com. Charles D.
Crawfurd, H. E.


Betterton, Henry B.
Carver, Major W. H.
Crooke, J. Smedley (Derltend)


Blundell, F. N.
Cassels, J. D.
Crookshank, Cpt. H.(Lindsey, Gainsbro)


Culverwell, C. T. (Bristol, West)
Hudson, R.S. (Cumberland, Whiteh'n)
Russell, Alexander West (Tynemeuth)


Curzon, Captain Viscount
Hume, Sir G. H.
Rye, F. G.


Dalkeith, Earl of
Hutchison, Sir Robert (Montrose)
Salmon, Major I.


Davidson, Major-General Sir J. H.
Iliffe, Sir Edward M.
Samuel, A. M. (Surrey, Farnham)


Davies, Maj. Geo. F.(Somerset,Yeovil)
Inskip, Sir Thomas Walker H.
Samuel, Samuel (W'dsworth, Putney)


Davies, Dr. Vernon
Jackson, Sir H. (Wandsworth, Cen'l)
Sandeman, N. Stewart


Dean, Arthur Wellesley
Jones, Sir G.W.H. (Stoke New'gton)
Sandon, Lord


Dixey, A. C.
Kennedy, A. R. (Preston)
Sassoon, Sir Philip Albert Gustave D.


Drewe, C.
King, Commodore Henry Douglas
Savery, S. S.


Eden, Captain Anthony
Kinloch-Cooke, Sir Clement
Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)


Edmondson, Major A. J.
Lamb, J. Q.
Sheffield, Sir Berkeley


Elliot, Major Walter E.
Little, Dr. E. Graham
Shepperson, E. W.


Ellis, R. G.
Lloyd, Cyril E. (Dudley)
Sinclair, Major Sir A. (Caithness)


England, Colonel A.
Loder, J. de V.
Skelton, A. N.


Ersklne, Lord (Somerset, Weston-s.-M.)
Looker, Herbert William
Smithers, Waldron


Everard, W. Lindsay
Luce, Major-Gen. Sir Richard Harman
Somerville, A. A. (Windsor)


Fairfax, Captain J. G,
Lumley, L. R.
Sprot, Sir Alexander


Fanshawe, Captain G. D.
MacAndrew, Major Charles Glen
Stanley, Lieut.-Colonel Rt. Hon. G. F.


Fenby, T. D.
Macdonald, Sir Murdoch (Inverness)
Stanley, Lord (Fylde)


Forestler-Walker, Sir L.
Macdonald, R. (Glasgow, Cathcart)
Stanley, Hon. O. F. G. (Westm'eland)


Forrest, W.
McLean, Major A.
Steel, Major Samuel Strang


Foster, sir Harry S.
Macmillan, Captain H.
Strauss, E. A.


Foxcroft, Captain C. T.
Macnaghten, Hon. Sir Malcolm
Stuart, Hon. J. (Moray ana Nairn)


Fraser, Captain Ian
Maitland, A, (Kent, Faversham)
Styles, Captain H. W.


Fremantle, Lt.-Col. Francis E.
Makins, Brigadier-General E.
Sueter, Rear-Admiral Murray Fraser


Gadle, Lieut.-Col. Anthony
Margesson, Captain D.
Sugden, Sir Wilfrid


Galbraith, J. F. W.
Marriott, Sir J. A. R.
Templeton, W. P.


Ganzoni, Sir John
Meller, R. J
Thom, Lt.-Col. J. G. (Dumbarton)


Gates, Percy
Merriman, Sir F. Boyd
Thomas, Sir Robert John (Anglesey)


Gauit, Lieut.-Col. Andrew Hamilton
Meyer, Sir Frank
Thompson, Luke (Sunderland)


Gilmour, Lt.-Col. Rt. Hon. Sir John
Milne, J. S. Wardlaw-
Thomson, F. C. (Aberdeen, South)


Gower, Sir Robert
Mitchell, S. (Lanark, Lanark)
Thomson, Rt. Hon. Sir W. Mitchell-


Grace, John
Mitchell, W. Foot (Saffron Walden)
Titchfleld, Major the Marquess of


Grant, Sir J. A.
Moore-Brabazon, Lieut.-Col. J. T. C.
Tomlinson, R. P.


Grattan-Doyle, Sir N.
Murchison, Sir Kenneth
Tryon, Rt. Hon. George Clement


Greene, W. P. Crawford
Nail, Colonel sir Joseph
Vaughan-Morgan, Col. K. P.


Grenfell, Edward C. (City of London)
Nelson, Sir Frank
Ward. Lt.-col.A.L.(Kingston-on-Hull)


Grotrlan, H. Brent
Newman, Sir R. H. S. D. L. (Exeter)
Warner, Brigadier-General W. W.


Guinness, Rt. Hon. Walter E.
Nuttall, Ellis
Warrender, Sir Victor


Hall, Lieut.-Col. Sir F. (Dulwich)
Oakley, T.
Watson, Sir F. (Pudsey and Otley)


Hamilton, Sir R. (Orkney & Shetland)
O'Connor, T. J. (Bedford, Luton)
Watson, Rt. Hon. W. (Carlisle)


Hammersley, S. S.
Penny, Frederick George
Watts, Dr. T.


Hanbury, C.
Percy, Lord Eustace (Hastings)
Wells, S. R.


Hannon, Patrick Joseph Henry
Perkins, Colonel E. K.
White, Lieut.-Col. Sir G. Dalrymple


Harland, A.
Peto, Sir Basil E. (Devon, Barnstaple)
Wiggins, William Martin


Harrison, G. J. C.
Peto, G. (Somerset, Frome)
Williams, A. M. (Cornwall, Northern)


Hartington, Marquess of
Power, Sir John Cecil
Williams, Com. C. (Devon, Torquay)


Harvey, Major S. E. (Devon, Totnes)
Pownall, Sir Assheton
Williams, C. P. (Denbigh, Wrexham)


Hastam, Henry C.
Preston, William
Wilson, Sir C. H. (Leeds, Central)


Headlam. Lieut.-Colonel C. M.
Price, Major C. W. M.
Wilson, R. R. (Stafford. Lichfield)


Henderson, Lieut.-Col. Sir Vivian
Raine, Sir Walter
windsor-Clive, Lieut.-Colonel George


Heneage, Lieut.-Colonel Arthur P.
Ramsden, E.
Womersley, W. J.


Hennessy, Major Sir G. R. J.
Reid, D. D. (County Down)
Wood, B. C. (Somerset, Bridgwater)


Hills, Major John Waller
Remer, J. R.
Wood, E. (Chest'r, Stalyb'ge & Hyde)


Hilton, Cecil
Rhys, Hon. C. A. U.
Wood, Rt. Hon. Sir Kingsley


Hohler, Sir Gerald Fitzroy
Rice, Sir Frederick
Woodcock, Colonel H. C.


Holbrook. Sir Arthur Richard
Richardson, Sir P. W. (Sur'y, Ch'ts'y)
Wortnington-Evans, Rt. Hon. Sir L.


Hope, Capt. A. O. J. (Warw'k, Nun.)
Robinson. Sir T. (Lanes., Stretford)
Yerburgh, Major Robert D. T.


Hopkinson, A. (Lancaster, Mossley)
Rodd, Rt. Hon. Sir James Rennell
Young, Rt. Hon. Sir Hilton (Norwich)


Hore-Bellsha, Leslie
Ruggles-Brise, Lieut.-Colonel E. A.



Howard-Bury, Colonel C. K.
Runciman, Rt. Hon. Walter
TELLERS FOR THE AYES.—




Major Cope and Captain Wallace.


NOES.


Adamson, W. M. (Staff., Cannock)
Dennison, R.
Hirst, W. (Bradford, South)


Ammon, Charles George
Duncan, C.
Hollins, A.


Attlee, Clement Richard
Edwards, C. (Monmouth, Bedwellty)
Hudson, J. H. (Huddertfleld)


Baker, Walter
Garro-Jones, Captain G. M.
Jenkins, W. (Glamorgan, Neath)


Barnes, A.
Gibbins, Joseph
John, William (Rhondda, West)


Barr, J.
Gillett, George M.
Johnston, Thomas (Dundee)


Batey, Joseph
Graham, Rt. Hon. Wm. (Edin.,Cent.)
Jones, Morgan (Caerphilly)


Broad, F. A.
Greenall, T.
Kelly, W. T.


Bromfield, William
Greenwood, A. (Nelson and Coins)
Kennedy, T.


Bromley, J.
Grenfell, D. R. (Glamorgan)
Kirkwood, D.


Cape, Thomas
Groves, T.
Lansbury, George


Charleton, H. C.
Grundy, T. W.
Lawson, John James


Cluse, W. S.
Hall, F. (York., W.R., Normanton)
Lee, F.


Compton, Joseph
Hall, G. H. (Merthyr Tydvil)
Lindley, F. W.


Connolly, M.
Hardle, George D.
MacDonald, Rt. Hon. J. R.(Aberavon)


Cove, W. G.
Hayday, Arthur
Macklnder, W.


Dalton, Hugh
Henderson, Rt. Hon. A. (Burnley)
Maclean, Nell (Glasgow, Govan)


Davies, Rhys John (Westhoughton)
Henderson, T. (Glasgow)
Malone, C. L'Estrange (N'thampton)


Day, Harry
Hirst, G. H.
Maxton, James




Montague, Frederick
Sexton, James
Townend, A. E.


Morris, R. H.
Shepherd, Arthur Lewis
Trevelyan, Rt. Hon. C. P.


Morrison, R. C. (Tottenham, N.)
Shlels, Dr. Drummond
Viant, S. P.


Murnln, H.
Short, Alfred (Wednesbury)
Wallhead, Richard C.


Oliver, George Harold
Slesser, Sir Henry H-
Watts-Morgan, Lt.-Col. D. (Rhondda)


Palin, John Henry
Smith, Ben (Bermondsey, Rotherhlthe)
Wellock, Wilfred


Parkinson, John Allen (Wigan)
Smith, H. B. Lees (Keighley)
Wheatley, Rt. Hon. J,


Pethick-Lawrence, F. W.
Smith, Rennle (Penistone)
Wilkinson, Ellen C.


Ponsonby, Arthur
Snell, Harry
Wilson, R. J. (Jarrow)


Potts, John S.
Snowden, Rt. Hon. Phillp
Windsor, Walter


Richardson, R. (Houghton-le-Spring)
Stephen, Campbell
Wright, W.


Ritson, J.
Stewart, J. (St. Rollox)
Young, Robert (Lancaster, Newton)


Saklatvala, Shapurji
Sullivan, Joseph



Salter, Dr. Alfred
Sutton, J. E.
TELLERS FOR THE NOES.—


Scrymgeour, E.
Thurtle, Ernest
Mr. Whiteley and Mr. Paling.


Scurr, John
Tinker, John Joseph



Bill read a Second time.

Bill committed to a Committee of the Whole House for To-morrow.—[Mr. A. M. Samuel.]

BANKERS (NORTHERN IRELAND) BILL.

Order for the Second Reading read.

Mr. A. M. SAMUEL: I beg to move, "That the Bill be now read a Second time."
Under the Bankers Act, 1845, six Irish banks were given the right to issue private notes. The Free State has now passed legislation to set up its own system of note issue. Therefore, we must legislate for Northern Ireland. Otherwise, the fiduciary issues applicable to Ireland would be applicable to Northern Ireland and be excessive. The banks have agreed the future fiduciary issue as in the Bill.

Mr. DAVID REID: I think it is right that some points on behalf of Northern Ireland should be put before the House. [Interruption.] The first point to which I want to call attention is with regard to Clause 3 of the Bill, which provides that:
For the purposes of the provisions of the Bankers (Ireland) Act, 1845, which relate to the issue of banknotes against gold and silver coin, there shall not be included any gold or silver coin held by a banker at any office outside the United Kingdom.
In order to understand this Clause, it is necessary to consider what is done by the Act of 1845. That Act laid down that banks in Ireland which claimed to issue notes should, before a certain date, obtain from the Commissioners of Stamps and Taxes a certificate of authorisation showing the amount of the note issue authorised and the proportion of gold
and silver coin held in respect thereof; and in some cases the banks so certified had only one office in Northern Ireland. It is, therefore, necessary that some Amendment should be made to this Bill which would give a second choice, enabling hanks to be selected which have more than one office at which stocks of coin may be kept for the purpose of the note circulation.
As to Clause 2 of the Bill, which prohibits the putting in circulation of any bank or other notes forming part of the currency of any country outside the United Kingdom, that, I take it, is intended to prevent Free State currency notes from coming into competition with Treasury or currency notes in Northern Ireland. I should like some assurance that some provision will be made to cover such cases as that of a dealer in Northern Ireland going to a fair in Southern Ireland, when it will be necessary for him to draw money in Free State currency in order to make his purchases there. There is another and much larger question which must be dealt with under this Bill. The amounts of the fiduciary issues of the banks are very much reduced, and all of these banks, except the Bank of Ireland, have their head offices in the United Kingdom. They remain subject to the Bank Act, 1845, under which the whole of their issue, in addition to their fiduciary issue, must be covered by coinage. As the fiduciary issue is very much reduced, there will be an immense gap and the banks will have to add an enormous sum of coinage to the amount they already hold to cover what is outside the new fiduciary issue. To take one example, the old fiduciary issue of the Bank of Ireland is about £2,700,000. Under this Bill it is going to be £4,100,000. If no provision is made in the Bill the Bank of Ireland will have to find a sum of over £2,000,000.
There is a further point. The Act of 1845 remains in operation, except as slightly modified by this Bill, and covers the note issue applicable to the whole of Ireland. Under the Free State Currency Act, part of the issue is to be allocated to Southern Ireland, and it is necessary to make some provision by which that amount can be deducted from the amount outstanding, otherwise the banks will be compelled to raise a very large sum of money, and large quantities of Government security must be thrown by the banks on the market. All these are points which have not been adequately considered, and before the further stages of the Bill are taken there should be some consultation between the representatives of the Irish banks and the Treasury and some attempt made to meet these points or enormous inconvenience will be caused. Under the circumstances it is impossible to take the further stages of the Bill until some definite agreement is arrived at. It is obvious that many points must be settled before the Bill can be made to apply to the state of affairs brought into operation by the Free State Currency Act. I do not oppose the Second Reading but I ask that some further consideration should be given to the matter.

Major ELLIOT: I can assure my hon. Friend that full consideration will be given to these points when the Committee stage is reached. Some of them are
obviously Committee points. Not only that, but the Chancellor of the Exchequer and the Financial Secretary to the Treasury will be glad to see any representatives of the banks, or the hon. Member himself, to discuss the points before the further stages of the Bill are taken. With that assurance, I hope he will allow us to have the Second Reading.

Bill committed to a Committee of the Whole House for Tomorrow.—[Mr. A. M. Samuel.]

REPRESENTATION OF THE PEOPLE (UNIVERSITY OF READING) BILL.

Read a Second time.

Bill committed to a Committee of the Whole House for To-morrow. — [Mr. Somerville.]

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Twelve Minutes before Twelve o'Clock.